Salamander Discovers Gas at Bedug-1 Well (Indonesia)

Salamander announces that the Bedug-1 exploration well in the Bontang PSC, offshore Indonesia, has been concluded as a gas discovery. Bedug-1 was drilled using the Ocean General semi-submersible rig, the well reaching a total depth (“TD”) of 1,693 m true vertical depth sub-sea (“TVDSS”).

Well Results

The company last Thursday announced that the well encountered a gas-bearing sandstone interval of 5m thickness in the Lower Pliocene BT40 primary target as confirmed by log data. Within the BT45 primary target, the interval of well-developed sandstones from which oil was tested at South Kecapi were found to have thinned out on the crest of the Bedug structure. However, with these thinner sandstones containing strong oil shows, the potential for a commercial oil discovery remains and further investigation of the up-dip extent of the South Kecapi oil discovery is warranted.

After deepening the well into the top of the BT50 target interval, Bedug-1 experienced a high pressure kick that came from a severely over-pressured 5.5m thick sandstone. Both log and pressure data have demonstrated this reservoir to be gas bearing, with log data from additional underlying thinner bedded sandstones also interpreted to be hydrocarbon-bearing. However, due to increasing formation pressures the well had to be suspended before fully evaluating the BT50 interval and without reaching the BT65 and BT80 targets. Based on the pressure profile in the well it was concluded that the deeper objectives could not be drilled and evaluated safely with the equipment available on the rig. This also precluded the drilling of a side-track down-dip to further evaluate the oil bearing BT45 interval.

Forward Plan

Completion of the Bedug-1 well concludes the current phase of Salamander’s multi-well programme in the North Kutei basin. This campaign has yielded the South Kecapi oil and gas discovery; the Bedug gas discovery; and wet gas at North Kendang which experienced a high pressure kick. Work is on-going to evaluate the commercial potential of the discoveries made to date, and Salamander intends to re-drill the North Kendang well (which, as announced on 22 May, is subject to an insurance claim). In parallel, new well data is to be integrated into a technical assessment of the Bontang and Southeast Sangatta PSCs, which both retain a significant undrilled inventory of prospects.

James Menzies, Chief Executive of Salamander, commented:

“Finding over 10 metres of gas pay on the crest and 11 metres of oil pay on the flank of the Bedug structure is very encouraging. Though it is frustrating that the unexpectedly high pressures have prevented us from fully evaluating the Bedug and North Kendang prospects, each of the three wells has provided evidence of the all elements of the petroleum system, and we are now evaluating results while determining the next steps in the programme.”

 May 27, 2013

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