10 August 2016
Andalas Energy and
Power Plc
(‘Andalas’ or the
‘Company’)
Pertamina Approves TOE Proof of Concept Work Programme
Andalas Energy and Power Plc, the AIM listed Indonesian focused
oil and gas exploration company (AIM: ADL), is pleased to advise
that Pertamina, Indonesia’s national energy company, has approved
the Company’s Tuba Obi East (‘TOE’) proof of concept work
programme. The first step in this programme will be the
recompletion of the existing TOE-1 well and production testing of
the gas bearing Air Benakat Formation (‘ABF’).
Highlights:
- The TOE-1 production well will be recompleted to the ABF and
production testing of the gas will assess deliverability,
recoverable volumes, and gas quality at TOE
- The workover reduces Andalas’ upfront costs significantly and
expedites the acquisition of key subsurface data. This new
data will enable the optimisation of the future drilling
campaign
- Andalas, as the technical operator, is now finalising the
recompletion design, tender documents, and mobilisation plans
- Budgetary approval for the programme will be sought from
Pertamina in the coming weeks, following which work will commence
onsite
Andalas CEO, David Whitby,
said: “Over the past two months we have been working closely
with Pertamina and our joint venture partner, PT Akar Golindo, to
determine the most cost effective way to evaluate the gas in ABF at
Tuba Obi East. Pertamina has recognised the significant
potential of the ABF gas, its close proximity to a high demand
energy market, and that the proof of concept work programme will
quickly and efficiently assess the gas quality, quantity and
deliverability.
“Importantly, the TOE proof of
concept programme is in line with Andalas’ strategy to develop a
gas-to-power business whilst contributing at the local level to the
Government of Indonesia’s objective of decreasing the country’s
power shortfall. The approved programme will also reduce
near-term costs by around 60%, allowing us to gather crucial
subsurface data weeks earlier whilst simultaneously avoiding any
potentially lengthy land acquisition delays.”
Further Information
The TOE field contains three existing wells that intersect the
gas bearing ABF. The recent extensive subsurface technical
review has identified the centrally located TOE-1 well as the best
candidate for recompletion and testing of the gas in the
zone. As part of the re-entry programme well casing integrity
will be assessed; the well will then be recompleted to the
shallower ABF; a multi-rate production test will then assess
formation productivity; and pressurised gas samples will be
collected for laboratory quality testing.
The information gathered by the programme will contribute to
better location selection for future delineation and development
wells and support gas processing and power plant front-end
engineering (FEED) and design studies. It will also enable
the joint venture to complete a gas reserves assessment and
commence gas and power sales negotiations.
Tuba Obi East
The Tuba Obi East oil and gas concession area is located in the
Jambi province in Sumatra,
Indonesia, approximately 30 km north-west of Jambi
city. The concession covers an area of 55 sq km in the
South Sumatra basin and is close
to the major Sumatra gas pipeline
to Duri and Singapore.
Tuba Obi East was discovered in 1986 and to-date three wells
have been drilled on the concession, with current production of
light, sweet crude oil on an intermittent basis from one well.
All three wells tested near pipeline quality gas in the key
South Sumatra hydrocarbon bearing
formations, namely, the ABF and TAF. In April 2016 Gaffney Cline & Associates
reported Best Estimate Gross Prospective Resources of 43.7 billion
cubic feet (Bcf) of gas in the ABF upper and lower reservoirs
within the TOE structure.
Of the six wells that have been drilled through the gas bearing
zones (three wells within the concession and a further three just
outside), several have flowed gas to surface at rates up to 3
million cubic feet per day (MMscf/d) of gas. Crucially, the
ABF has flowed gas outside the concession at commercial rates, but
only limited data from this formation has been gathered within the
concession area.
Andalas’ near-term work programme is aimed at gathering data to
support rapid development of the TOE gas in conjunction with a
small scale, independent power project.
**ENDS**
For further information, please contact:
David Whitby |
Andalas Energy and
Power Plc |
Tel: +62
21 2783 2316 |
Sarah Wharry
Craig Francis |
Cantor Fitzgerald
Europe
(Nominated Adviser and Joint Broker) |
Tel: +44 20 7894 7000 |
Lucy Williams
Charles Goodfellow |
Peterhouse Corporate Finance
Limited (Joint Broker) |
Tel: +44 20 7469 0930 |
Colin Rowbury |
Cornhill Capital (Joint Broker) |
Tel: +44 20 7710 9610 |
Frank Buhagiar
Susie Geliher |
St Brides Partners Limited |
Tel: +44 20 7236 1177 |