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JAKARTA (Rambu Energy) – Cue Energy Resources Ltd, Australia’s oil and gas company, has set an ambitious plan to increase its production and reserves in Asia, Australia and New Zealand, with a target of five million barrels of oil equivalent (BOE) reserves addition by the end of calendar year 2018.
Cue has reported 3.2 million BOE 1P and 5.3 million BOE 2P reserves as at Dec. 31, 2012. In addition, Cue’s discovered contingent resources are estimated to be 19.5 million barrels of oil equivalent (MMBOE).
“We plan to achieve this in part by safeguarding and enhancing the base production at Maari and Oyong and Wortel fields (in offshore East Java, Indonesia) and capturing near term growth opportunities,” the company’s Chairman Geoffrey King said at the company’s shareholders meeting.
“This means acquiring producing assets and restocking or deepening the exploration pipeline with a focus on new, suitably prospective onshore exploration acreage where discoveries can be commercialized in the short term,” he said.
King said the company has set strategies to achieve a solid production in 2014/2015. The strategy has brought about positive results as reflected in the development drilling Maari offshore Taranaki Basin, New Zealand, investment in maintaining production levels at Oyong and Wortel, its recent zero-cost equity increase in the Mahakam Hilir PSC, and the recently announced farm-in to the prospective Mahato Block.
Cue Energy owns 15 percent participating interest in Sampang PSC, which is operated by Santos Ltd. Oyong and Wortel fields are located within the Sampang block, offshore Madura, East Java.
It also owns 100 percent interest in Mahakam Hilir PSC in Kutei Basin, East Kalimantan and 12.5 percent interest in Mahato PSC in Central Sumatera Basin.
In the financial year ending September 2014, the company’s sales production for both oil and gas for the year was 0.65 million barrels of oil equivalent (boe)) compared to 0.93 million boe last year, down 30 percent. Total oil sale volumes from Maari for the year were 0.083 million barrels, down 53.6 percent on the previous year due to the disruption.
The decline was also contributed by the natural field decline at Oyong field within the Sampang PSC.
This resulted in total production income of A$34 million, significantly lower than the preceding year by A$16 million. The average net price received for oil was approximately A$120 and gas was approximately A$5.40.
The company reported a loss for the year after tax of $2.2 million on higher expenses. This translated into a loss of (0.31) cents per share compared to a profit of 0.91 cents per share in the preceding year.
King said its Indonesian operations, the operator (Santos Ltd) is committed to carry out well interventions to increase oil production at Oyong and the installation of additional onshore compression at the Wortel Grati gas plant to maintain gas production.
The stabilization of production at existing levels is expected through 2016 and possibly beyond, King said.
The company participated in two exploration wells during the year: Manaia-2, offshore New Zealand and Naga Utara-2 well in the Mahakam Hilir block, onshore East Kalimantan.
Subsequent to year end, the company also participated in the offshore New Zealand Whio exploration well where it was fully carried for its share of drilling costs. The Manaia-2 well encountered hydrocarbons and the drilling results are being further assessed. Unfortunately the Whio and Naga Utara-2 wells were unsuccessful and were plugged and abandoned.
“Although two of the exploration wells were unsuccessful the company remains committed to investing capital in targeted exploration located in core areas and participating with proven operators,” King said.
He said the company’s focus on restocking the exploration portfolio in the core areas has yielded early success with the recent farm-in to the prospective Mahato acreage and the increase to 100 percent working interest in Mahakam Hilir. The company plans to drill wells in both these properties in the next 12 months and also plans to capture oil and gas opportunities in the Cooper Basin.
The company continues to be in a strong cash position with A$39 million in cash at 30 September 2014. There are some cash commitments in the current quarter, including the recent farm-in to Mahato, Maari development drilling and the close out of the Naga Utara-2 well, all of which have cost the company approximately A$15 million in cash. (*)
