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13 Feb 2012 09:51
13 February 2012
Sound Oil plc
("Sound Oil" or "the Company")
Operations Update - Indonesia
Sound Oil, the upstream oil and gas company with assets in Italy and Indonesia, announces the following update on its current operations in Indonesia.
Citarum PSC, Java (Sound Oil 20%)
Sound Oil has been advised by the Citarum Operator of continuing difficulties on the Cataka-1 exploration well. Progress in drilling the upper section has continued to be difficult due to the unstable nature of the rock formations. Attempts to drill ahead from the 13 3/8" casing were not successful, necessitating a second side-track of the well which was established by milling a window in the casing. Similar difficulties to the first side-track have been encountered in this new section. Consequently the Operator has today recommended to the Joint Venture partnership to abandon the well at the present depth of 1413 ft. The Operator intends to undertake a detailed post drilling evaluation of the operation with a view of returning to the prospect within or at the end of the current drilling campaign. The rig will now be demobilised and moved to the Jatayu-1 location, approximately 20 km to the southeast.
Bangkanai PSC, Kalimantan (Sound Oil 5%, carried)
The Operator on Bangkanai has advised that the rig for the Kerendan drilling campaign is expected to be mobilised from Batam Island, Riau to Kalimantan by the end of this month. It is intended that the rig will commence operations by drilling four development wells on the Kerendan gas field and then begin the exploration programme on the licence.
Gerry Orbell, Sound Oil's Chairman and Chief Executive, commented:
"It is disappointing that we have had drilling difficulties at Cataka and that the well has had to be abandoned before reaching the target. The well was a wildcat located in an unknown geological terrain and we are sure that the experienced Operator did everything to try to get through the unstable formation. Following the Operator's evaluation the partnership will consider returning to the Cataka site.
As soon as operations at Cataka are completed, we are moving straight away to Jatayu which is the next well in the three well program on the Citarum PSC. The Jatayu exploration well will target prospective resources of 290 Bscf (P50).
In contrast, it is encouraging that the rig for the Bangkanai campaign will shortly be on the move after its re-fit for high pressure/high temperature operations. This rig is scheduled to drill 5 to 6 wells which will allow the Kerendan Gas Field to be put on stream and explore the very large prospect at depth below Kerendan."
For further information please contact:
Sound Oil Gerry Orbell, Chairman and Chief Executive Michael Cope, Chief Operating Officer
| Tel: +44 (0)1372 365745 |
Smith & Williamson - Nominated Adviser Azhic Basirov David Jones
| Tel: +44 (0)20 7131 4000 |
Investec - Broker David Flin
| Tel: +44 (0)20 7597 4000 |
Buchanan Tim Thompson Ben Romney Helen Chan
| Tel: +44 (0)20 7466 5000 |
The information contained in this announcement has been reviewed by Sound Oil's Chief Operating Officer, Dr M. J. Cope BSc PhD CGeol FGS, a qualified petroleum geologist. "Bscf" means billions of standard cubic feet of gas; "P50" refers to a 50% chance of finding a given volume and is consistent with SPE (The Society of Petroleum Engineers) guidelines.
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