Lion Energy has entered into an agreement with Silver City Drilling for the use of the SCD-20 rig to drill the Bula Karang-1 exploration well in the East Seram Production Sharing Contract area, Indonesia.
The start of drilling is scheduled for July 2026, with the rig secured within the outlined budget.
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The well will target an unrisked P50 prospective resource estimated at 12 million barrels (mbbl) in its primary carbonate objective, with the prospect assigned a 38% geological chance of success.
Lion Energy holds a 45% working interest in the project and is being carried by its partner for 88% of the estimated well cost, resulting in a limited capital outlay for the company.
Lion Energy executive chairman Tom Soulsby said: “Securing the rig within budget is a key milestone as we move toward drilling Bula Karang-1. The prospect is a shallow carbonate reef structure with the potential to host material oil volumes, and importantly provides exposure to a broader 50 million barrel (P50) combined unrisked Prospective Resource in Bula Bay.”
“With partner funding covering the majority of the well cost, Lion retains a 45% interest, providing strong leverage to success while maintaining a low capital commitment. In a success case, nearby infrastructure provides a clear pathway to rapid, low-cost development and early cashflow. Bula Karang-1 is a high-impact, capital-efficient exploration opportunity and an important step in unlocking the potential of the East Seram PSC.”
The planned Bula Karang-1 well will be drilled as a deviated well, starting from an onshore site with a lateral deviation of close to 1,000m offshore to intercept the crest of a seismically identified carbonate build-up at a depth of roughly 550m below sea level.
Secondary targets include possible oil zones within overlying sandstone reservoirs.
The SCD-20 rig is equipped with a hydraulic top drive system, hydraulic pipe handling, and directional drilling capabilities. It also includes a 90-ton hook load and 17,500 ft/lbs of rotary torque to meet the well design requirements.
The rig is currently operating in East Java, Indonesia.
Regulatory progress for the project includes approval for site use, submission of the environmental plan to government authorities, and execution of a land sharing agreement, with formal land registration planned for this month in Bula.
Silver City Drilling finalised the site survey last month, which included borehole testing of both the drill location and access road.
Contracting for other key services, including directional drilling, cementing, fluids, and wireline, is ongoing.
Exploration activity on the East Seram PSC has been ongoing since 2018, including a 664km offshore seismic survey in 2020 that focused on the Plio-Pleistocene play, where the Bula Karang prospect was subsequently identified as a reefal carbonate feature.
Similar carbonate potential is present at adjacent prospects, with further estimates indicating over 30mbbl of unrisked P50 prospective resource in carbonate plays and around 20mbbl in associated sandstone targets.
Existing storage and export facilities on Seram Island could allow for prompt commercialisation if exploration is successful.
