The PSC is a high-potential onshore block covering the south of Madura Island, Indonesia, which is surrounded by several major oil and gas fields in the East Java Basin, according to Cooper.
The first onshore well in the PSC is expected to be drilled in this block in early 2006 following seismic processing and interpretation. The seismic work will also define the follow-up targets in the PSC at all play levels.
The South Madura PSC is immediately to the north of the Jeruk and Oyong oil and gas discoveries. It also lies close to ExxonMobil’s recently announced Banyu Urip discovery in East Java.
Cooper Energy’s had identified several leads and prospects at the Ngrayong and Kujung geological levels, acccording to CEO Michael Scott.
“At the Kujung carbonate level there appears to be a reef structure, which may be analogous to the Jeruk Field,” he said.
“The reef prospect has been previously overlooked because it lies in the transition between the onshore and offshore exploration areas. At the shallower Ngrayong sandstone level, an existing well on the block encountered a four-metre gas sand, but this was not tested as gas was not considered economic at the time. This discovery may represent an economic gas field pending further evaluation.”
Both the Kujung carbonate and the overlying Ngrayong sandstone prospects could be tested by a single well, which would be the priority focus of the proposed exploration drilling program, according to Cooper.
“Should the exploration well be successful there are a large number of follow-up targets in the PSC at all hydrocarbon play levels,” Scott said.
“The onshore location of the South Madura PSC means that the cost of exploration drilling and development is considerably lower than that for offshore fields. The PSC’s proximity to Surabaya, the second largest city in Indonesia, enhances the range of marketing options.”
The farm-in to the PSC will cost Cooper Energy US$1.5 million, made up of past costs, vendor consideration and PSC contractual payments. Going forward, Cooper Energy will pay 50% of the cost of a US$8.9 million work program (Cooper Energy share: US$4.5 million), comprising seismic and wells.
Cooper Energy will fund its share of acquisition and exploration expenditures from cash
reserves.
