Indonesia’s upstream regulator SKK Migas has approved a four-year extension to Cue Energy Resources’ Mahakam Hilir production sharing contract (PSC) in Kutai Basin, East Kalimantan, until May 2020.
The extension for a period of four years includes two contingent wells in the initial two years.
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During this period, the company has an option to drill or withdraw from the PSC and carry out geological studies, pre-FEED studies.
In the next two years, Cue Energy intends for a plan of development of Mahakam Hilir PSC.
The company operates the PSC and owns a 100% stake.
Cue Energy separately completed drilling of the Naga Selatan-2 (NS-2) exploration well and recovered oil and gas to surface.
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By GlobalDataGas was also flared to surface at the time of drilling the deeper section and the well was suspended to allow for future production testing.
The results from NS-2 have provided new information with regards to the existence of a potential deeper gas play.
Cue Energy is analysing results from the exploration activity and expects to announce an internal estimate of volumes in the second half of 2016.
The company’s move to 100% interest in Mahakam Hilir followed a technical review that identified a robust drill-ready oil prospect, Naga Selatan-2, which lies along the same trend as the Nangka oil field and the Pelarang South oil discovery.
Image: Mahakam Hilir PSC is in Kutai Basin, East Kalimantan. Photo: courtesy of Cue Energy Resources Limited.
