HALO in talks to operate Natuna Sea PSC

Offshore staff

THE HAGUE, the Netherlands – Hague and London Oil (HALO) has a conditional agreement to take an operated interest in the Duyung production-sharing contract offshore Indonesia.

The concession contains the undeveloped Mako natural gas discovery in the Natuna Sea, with in-place reserves estimated at 902 bcf.

Under the agreement, HALO would acquire an 85% interest from Singapore-based West Natuna Exploration Ltd. (WNEL), which would retain a 15% stake.

HALO has agreed to provide $0.5 million of working capital and to acquire long-lead items and/or contract services for the drilling an appraisal well, Mako South-1X, possibly next year.

If the farm-in goes forward, HALO would carry WNEL for its share of costs up to $10 million.

The well is part of the minimum working agreement for the PSC, but the partners may commit to a wider appraisal and development program.

Duyung covers an area of 1,673 sq km (646 sq mi) in water depths ranging from 60-100 m (197-328 ft). HALO believes the concession has significant shallow gas potential beyond Mako, which is covered by high-resolution 2D seismic and log data from three previous wells.

LASMO drilled Mako-1 in March 1999, the well encountering 23 ft (7 m) of net gas-filled sand at the top of the seismic anomaly followed by 60 ft of mudstone above a further 12 ft (3.6 m) of net water-wet sand at the base of the channel feature.

Wireline logs confirmed gas-down-to and water-up-to values consistent with the pre-drill gas water contact modeling of 1,420-1,450 ft (433-442 m).

Mako South-1X would be designed to improve reservoir understanding and reservoir performance on a drillstem test in order to establish permeability, saturation, and ultimate recovery.

Nearby infrastructure includes the West Natuna Transport System which delivers gas to local Indonesian markets and Singapore via a gas export pipeline.

09/28/2015

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