The firm said it unexpectedly identified signs of a potential reservoir on the Kruh block between 976ft and 1,006ft, with a net thickness of 25ft, while drilling the Kruh 28 well.
Its initial evidence was supported by geologic logging and wireline logging data.
Drilling on the Kruh 28 started on 22 June and is planned to continue towards the expected oil zone at between 2,836ft and 2,964ft.
Following this, IEC plans to report the final results from the well-drilling, which is due to be completed in the coming weeks.
Indonesia Energy expects the gas zone, if it is confirmed as a natural gas discovery, to add significant value to the Kruh 28 well’s expected oil discoveries.
IEC president Frank Ingriselli said: “We are certainly very excited about encountering this gas zone in the Kruh 28 well which, if fully confirmed, could provide significant upside to our plans to develop the Kruh Block, where our new wells at the current price of oil are expected to have net revenues in their first 12 months that is more than 150% of the cost to drill such well.
“Obviously oil prices are subject to volatility, but if the current high prices for oil are sustained as we move forward, we believe we will have the potential to grow our cash flow as new wells from our Kruh Block drilling programme begin to produce.
“Additionally, we are moving forward to aggressively set the stage to develop our potential billion-barrel equivalent natural gas Citarum Block, where the previous operator drilled a few gas discoveries.”