The blowout occurred in April 2001 when the Santos-operated well flowed in an uncontrolled manner while at 409m, without a riser. The drill pipe was severed and the drilling vessel moved off location. There was no damage to the drilling rig or injury to any personnel involved.

In the last two weeks a major gas sales contract was signed with PT Indonesia Power for the entire gas reserves of the Oyong field.

The Oyong field has over 90 billion cubic feet of proven and probable natural gas reserves and a conservatively estimated 5 million barrels of recoverable oil from the 80 million barrels of oil estimated to be in place.

Cue currently holds a 15% interest in the field and with production expected to be around 40 million cubic feet of gas per day the revenue will fund future exploration and development for the company.

The field is also located only 60km north east of PT Indonesian Power's 766 Megawatt open and combined cycle gas turbine facility at Grati, Indonesia.

The combined gas and oil flow stream will be processed onshore at a facility which will be established adjacent to the Grati Power station. First production is now expected to commence in early 2005.

Oil Search, operator of the Kimu field in the Papuan Basin (Cue 10.72%) also recently entered into an agreement with Mitsubishi Gas Chemical Corporation Inc and Itochu Corporation of Japan to complete a feasibility study into the potential for using PNG natural gas for manufacturing methanol in PNG.

The study will review location and infrastructure requirements and determine the funding and commercialisation options available for a methanol plant.

Kimu is estimated to contain in excess of 1 trillion cubic feet (Cue net share around 107 billion cubic feet) of recoverable gas that contains no sulphur and no carbon dioxide.

Any commercialisation of the field will be a significant bonus to Cue as the mountainous location of the field has already seen the asset written down.