Cue Energy, operator of the Mahakam Hilir PSC, located in onshore East Kalimantan, continued seeking a farm-in partner to participate in its upcoming appraisal drilling program of Naga Utara 4, in April 2019. The block is located in the onshore part of the Kutei Basin, on the western side of the prolific anticlinal trend that has produced the Sanga-Sanga and Badak fields.  The Naga Utara 4 well will be targeting prospective recoverable resources estimated at 10-13-34 Bcfg (low, best and high estimate respectively), with the primary objective within deltaic Miocene sandstones with good reservoir properties. The secondary target will be deeper pro-delta sandstones, with poorer reservoir quality and prospective resources of 20 Bcfg (best estimate). The well is planned to be drilled to approximately 915 m.  Naga Utara 4 has a geological chance of success of 50% and estimated cost of USD 2 million on a dry hole basis, with an additional USD 1 million estimated for testing and completion. Key risk for the well is represented by trapping, due to poor seismic definition and fault seal uncertainty.  The results of G&G studies, reprocessing of existing 2D seismic data, and new gravity gradiometry data acquired in 2016, have shown that the Naga Utara prospect is part of the same structural trend as the proven Sambutan field. The proposed Naga Utara 4 location is adjacent to the historical Sambutan 8 well, drilled in the 1930s. Log analysis on Sambutan 8 indicated that the well intersected a potential 100 m gross gas pay, which was not tested due to lack of interest for gas at the time.  The greater Naga Utara area is estimated to contain up to 50 Bcfg which could be unlocked by future exploration drilling. Further potential in the rest of the PSC is estimated between 100 and 250 Bcfg.  In case of commercial success at Naga Utara 4, the well could be put on production into the nearby Sambutan gas plant which is currently operating below capacity. Likewise, the block has direct access to infrastructure and local markets, being close to the Tanjung Batu power plant operated by PLN.  In May 2016, the Mahakam Hilir PSC was extended by 2+2 years, until May 2020. The extension included a new work programme involving two contingent wells in the first two years, followed by geological studies, pre-FEED studies and a Plan of Development in the latter two years. The drilling commitment has been deferred to May 2019, while the work programme for 2018 has been replaced by G&G studies.  Cue Energy is currently operator and sole interest holder in the block. The company is offering up to 40% participating interest, with the possibility to discuss operatorship with appropriately qualified companies. A Data room in Cueâs Jakarta office is available for interested parties. The farm-in opportunity was first offered in late April 2017.  For further information, interested parties may contact:  Witan Odakar  General Manager â Indonesia  witan@cuenrg.com  Â   Matthew Boyall  CEO â Australia  matthew.boyall@cuenrg.com  Background Information  The Mahakam Hilir block lies to the west of the prolific Mahakam Delta. The Mahakam Hilir PSC, initially covering an initial area of 344 sq km, was awarded in end October 2008 to SPC. It was offered during the 2007 Tender Round as a regular tender block. The company committed to invest USD 13.3 million for the first three years of exploration which included acquiring 200 km of 2D seismic and drilling of four exploration wells. Signature bonus paid was USD 2 million. After tax production splits for the block were set at 85/15 for oil and 70/30 for gas, in favor of the government.   A 200km 2D seismic survey was conducted by PT Daqing from late February to early May 2010. Interpretation of the 2010 2D seismic data coupled with well logs from the adjacent Sambutan field, field mapping and reprocessed vintage seismic data has identified a total of five prospects in the block.  Cue Energy reported on 4 October 2011 that it received government approval for the acquisition of 40% participating stake in the block from SPC. The deal, which was announced on 13 June 2011, required Cue Energy to refund 40% of SPCâs past costs, estimated to be around USD 4 million, in order to earn the said interest. Cue planned to pay this by end of October 2011 from its existing cash reserves. SPC retained 60% operating stake.  Cue became operator and sole interest holder in the block after the acquisition of 60% operating interest from SPC in March 2015. Cue was previously holding the balance of 40% non-operating stake.  In January 2017, New Zealand Oil and Gas (NZOG) became the majority shareholder of Cue Energy, increasing its stakes from 48.11% to 50.01%.  The possibility of a farm-out plan by Cue Energy for the block was first reported by the company in late October 2016, and was confirmed in late January 2017. The farm-down plan would support future exploration activities in the block, which at the time was focusing on further assessment of the Naga Selatan 2 discovery. As of March 2017, Cue indicated that further analysis of the 2016 gravity gradiometry data and shallow coring results showed lower prospectivity on the southern area of the block. The focus hence shifted to the northern area.  Naga Utara 2ST1  SPC, previous operator of the block before Cue, plugged and abandoned appraisal well Naga Utara 2ST1 in early January 2014, with gas shows encountered. The well reached its primary objective and minor indication of gas were encountered in the 8 1/2â hole, however the operator could not evaluate the interval due to technical issues during drilling. The well was primarily intended to explore the Middle Miocene Mentawir sands while the Miocene fluvio-deltaic sands of the Pulau Balang Formation provided a secondary target.  The operator was planning to drill another appraisal well, Naga Utara 3 in 2014, contingent to positive results from Naga Utara 2, but the plan was likely changed following the unsuccessful drilling campaign.  Naga Selatan 2  Cue spudded appraisal well Naga Selatan 2 in January 2016. The well found oil from MDT test plus oil and gas shows from several intervals during drilling. Naga Selatan 2 was drilled to TD at approximately 357 m, shallower than the PTD of 683 m MD because of drilling constraints related to high pressure. The well was suspended in view of future production testing.     In March 2017, Cue indicated that further analysis of the 2016 gravity gradiometry data and shallow coring results showed lower prospectivity on the southern area of the block, and the exploration focus shifted to the northern area. Naga Selatan 2 has been subsequently plugged abandoned around September 2018.
Cue Energy, operator of the Mahakam Hilir PSC, located in onshore East Kalimantan, continued seeking a farm-in partner to participate in its upcoming appraisal drilling program of Naga Utara 4, in April 2019. The block is located in the onshore part of the Kutei Basin, on the western side of the prolific anticlinal trend that has produced the Sanga-Sanga and Badak fields. 