Range Resources reported on 30 April 2019 that the company is looking for a potential buyer to take over its interest in Perlak KSO, located onshore in the North Sumatra Basin. The decision to divest was made after considering the lack of continuous sustainable production from the Perlak oil field, after effort was made to carry out a workover programme.  The joint venture commenced a well workover programme in the Perlak oil field by reactivating one well, POG-D, in early July 2018. The well was tested to produce 145 barrels of light and high-quality oil in a multiple-reservoir zone over a period of two weeks, with a total of 117 hours of intermittent pumping period. Further study was planned to be carried out to determine the stable pumping rate. The company then started its next operation at the second well, POG-E. The well encountered downhole obstruction and the process of removing the blockage was reported to be ongoing.  In September 2018, Range reported that production from the two initial wells was below expectations, therefore the operator would continue with a reduced work programme until the end of the year. Workover operations continued with the reopening of two more wells, one in Q4 2018 and one in January 2019. However, the operator encountered difficulties due to poor conditions of the casings of the old wells and complexity of the wellheads.    Other wells originally identified for this work program were Perlak 261, Perlak 258, Perlak 233, Perlak 224, Perlak 222, and Perlak 21.    On 21 March 2018, the company reportedly received approval from Pertamina for the 2018 work programme, which is aimed at restoring production from the oil field. The plan included the reopening of seven to ten existing wells and workovers on two existing wells, all of which were previously on production. In addition, geological, geophysical and integrity studies were to be conducted.    Range expected to recommence production from the field by mid-2018, targeting total production rates of approximately 200 bo/d from the workover programme. Any produced oil would have been trucked to a receiving point in Pangkalan Susu field, located approximately 160 km from the field, and sold to Pertamina. The total estimated expenditure for the 2018 programme was USD 6 million, exceeding the minimum expenditure of USD 0.55 million as initially agreed upon.    The Perlak KSO was awarded by Pertamina to local joint venture PT Aceh Timur Kawai Energi in 2017. Joint venture partners are PT Aceh Timur Energi dan Mineral (PT ATEM), with 51% interest, and PT Lubuk Kawai Raya (PT Lukar), with 49%. PT Lukar is a 78%-owned subsidiary of PT Hengtai Weiye Oil and Gas.     In October 2017, Range Resources completed the acquisition of 60% stakes in Hengtai, earning a 23% indirect interest in the Perlak KSO.     PT ATEM is a business entity controlled by the East Aceh local government. Upon completion of a three-year work programme in September 2020, PT ATEMâs participation in the KSO will be reduced to 10% with Lukarâs interest increasing to 90%. This will result into Range increasing its indirect interest in the KSO to 42%.    The Perlak field has produced approximately 50 MMbo and 64 Bcfg until the early 1940s. According to a third-party evaluation commissioned by Range Resources as of August 2017, the field holds remaining resources of approximately 13 MMbo and 47 Bcfg.    Background Information    The Perlak field was discovered by Royal Dutch around 1900. The field produced until the 1940âs when it was shut-in due to WWII. According to Range Resources, over 300 wells have been drilled in the field and approximately 50 MMbo have been produced, from reservoirs shallower than 1,000 m.    Prior to Rangeâs entry, the field was operated by Pacific Oil and Gas under an earlier KSO agreement with Pertamina. The field was brought back on production in May 2011 from two wells producing light oil (53Â°API) at rates of 180 bo/d and 100 bo/d respectively.    The Perlak KSO was terminated by Pertamina in April 2013 due to failure by the operator to meet the agreed obligations.    Local media reports in early October 2016 indicated that PT Lubuk Kawai Raya and the East Aceh regional administration signed a Memorandum of Understanding for the rights to operate the Perlak field.    The minimum work programme for the first three years of operations in the Perlak KSO calls for a total expenditure of USD 3.8 million. The first year programme (due for completion by September 2018) involves G&G and reservoir studies, well surveying and one well workover, for a total value of USD 0.55 million. The second year (by September 2019) includes 3D seismic data evaluation and three well workovers, for a total value of USD 1 million. The third year (by September 2020) includes G&G and reservoir studies, plus drilling one well, for a total value of USD 2.25 million.
Range Resources Ltd Perlak KSO - Planning to divest its 23% working interest