Lion Energy Ltd. has received formal approval from the Directorate General of Oil and Gas (MIGAS) of the award of two separate unconventional joint studies over two highly prospective areas in Indonesia’s North and Central Sumatra basins.
In North Sumatra, Lion will lead a joint study covering an area of 1,808.5 square miles (4,684 square kilometers) in the southeast of the basin. Under an agreement announced by Lion Nov. 19, 2014, Lion will operate the study with a 55% interest; and the partners in the conventional Bohorok production sharing contract (PSC), which partly overlaps the area of the unconventional joint study, jointly have 45% interest.
In Central Sumatra, Lion will conduct a joint study over an area of 956.7 square miles (2,478 square kilometers) covering part of the Bengkalis Graben, a major oil province in the east of the basin. Lion is the operator of the study with 75%, and the conventional rights holder in the partly overlapping area, has a 25% interest.
The studies will be undertaken with assigned universities and will refine Lion’s understanding of the key unconventional plays and prospective unconventional resources in the areas. This is anticipated to take approximately six months to complete; on completion, the joint study participants will hold certain priority rights, including the right to match the highest bid, for any resultant unconventional PSC.