Indonesia Energy Announces Updates on Discovery Wells Drilled in 2022 and Development Plans for 2023
Company negotiating for Kruh Block contract extension
2023 new seismic operations seek to maximize returns from the Kruh Block drilling program
JAKARTA, INDONESIA AND DANVILLE, CA, March 27, 2023 (GLOBE NEWSWIRE) -- Indonesia Energy Corporation (NYSE:INDO) ("IEC"), an oil and gas exploration and production company focused on Indonesia, today announced updates on its discovery wells drilled in 2022 and its ongoing development activities and plans for 2023 and beyond, including a potential contract extension for its Kruh Block.
To maximize the production at Kruh Block, IEC is in the process of conducting a workover of the existing Kruh-21 well, which was drilled in 2015. Regarding the Kruh-28 well, as previously announced, IEC unexpectedly found evidence of a potential natural gas bearing reservoir between the 976 and 1,006 feet interval with 30 feet net thickness. This initial evidence was supported by both wireline logging and geologic logging data, and subsequent gas flaring. Oil production from the Kruh-21 and Kruh-28 wells is expected in the third quarter of 2023. If a commercial amount of gas is tested in the Kruh-28 well, a development plan will be submitted to the Government of Indonesia for approval and with the goal commencing gas production in 2024.
Fracture stimulation of the already oil producing Kruh-27 well has been completed, with 80,000 pounds of proppants having been injected into the sand producing reservoir with the goal of increasing production productivity. A previous fracturing program conducted in IEC's Kruh-26 well brought the original production of 18 barrels of oil per day (BOPD) to a post-fracturing rate of 75 BOPD.
As previously announced, in order to maximize the potential of Kruh Block after several encouraging new oil discoveries made by IEC during 2021 and 2022, IEC is currently in the process of securing 30 square km of new three-dimensional seismic data at Kruh Block. The environmental permit has been issued and the material needed to conduct this seismic work has been secured. Concurrently, the seismic acquisition contractor has been selected and IEC is finalizing the detailed plan and model for the exploratory activity.
IEC believes that this new work at Kruh Block, together with what has been learned from 2022 oil and gas discoveries, will greatly assist IEC in ascertaining the best locations conduct its continuous drilling campaign at Kruh Block that will look to develop not only the one formation currently being targeted, but also look to develop what appears to be at least three additional oil formations that could contain significant commercial quantities of oil and natural gas. After completion and full interpretation of this seismic operations IEC plans to re-start its continuous drilling campaign at Kruh Block. IEC currently expects this seismic exploratory and interpretive work to be concluded before the end of 2023, and IEC still plans on drilling a total of 18 new wells at Kruh Block, four of which have already been completed, by the end of 2026. Previously IEC had announced its intention to complete these 18 new wells by the end of 2025.
IEC is also in the process of negotiating a five-year extension of the contract covering the Kruh Block with the Government of Indonesia which would extend the term of IEC's operatorship until 2035. This extension would effectively give IEC over 12 more years to fully develop the existing 3 oil fields, and 5 other undeveloped oil and gas bearing structures at Kruh Block. IEC has submitted its work program proposal and it has been accepted by the Government by its responsible entities via Pertamina (the Indonesian state-owned oil and gas company) and SKK Migas, the Indonesian special task force for upstream oil and gas business activities. IEC is currently waiting for the draft contract to be approved.
At the same time, on IEC's million-acre Citarum Block, the environmental permit for two-dimensional seismic data acquisition is in the final approval process. IEC expects to receive the permit in the third quarter of 2023, which would allow IEC begin the data acquisition work in the fourth quarter of 2023.
Mr. Frank Ingriselli, IEC's President, commented "We are pleased with the significant achievements our company made in 2022 with the two back-to-back oil discoveries and the potential new gas find. We believe that Kruh Block is a world class asset and, in order to maximize future production capability, we have commenced on our program of conducting seismic operations across the entire Kruh Block so that we can positively leverage what we have learned from our recent discoveries, including our gas discovery, and look to determine the best locations to start our continuous drilling campaign. To accommodate for the required additional time needed to maximize the Kruh asset, we have commenced negotiations with the government to extend the contract term of the Kruh Block. Additionally, we have now also moved forward with activities at our potential billion-barrel equivalent natural gas 1,000,000-acre Citarum Block, where the previous operator drilled a few gas discoveries. In short, we've never been more excited about IEC's potential, and we look forward to continuing our efforts as we seek to drive positive shareholder value."
About Indonesia Energy Corporation Limited
Indonesia Energy Corporation Limited (NYSE:INDO) is a publicly traded energy company engaged in the acquisition and development of strategic, high growth energy projects in Indonesia. IEC's principal assets are its Kruh Block (63,000 acres) located onshore on the Island of Sumatra in Indonesia and its Citarum Block (1,000,000 acres) located onshore on the Island of Java in Indonesia. IEC is headquartered in Jakarta, Indonesia and has a representative office in Danville, California. For more information on IEC, please visit www.indo-energy.com.
Cautionary Statement Regarding Forward-Looking Statements
All statements in this press release of Indonesia Energy Corporation Limited ("IEC") and its representatives and partners that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Acts"). In particular, when used in the preceding discussion, the words "estimates," "believes," "hopes," "expects," "intends," "on-track", "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Acts and are subject to the safe harbor created by the Acts. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of the IEC's control, that could cause actual results (including, without limitation, the anticipated results of IEC's exploration, drilling and production activities and the impact of such activities on IEC's results of operations as described herein) to materially and adversely differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth in the Risk Factors section of the Company's annual report on Form 20-F for the fiscal year ended December 31, 2021, filed on May 2, 2022, with the Securities and Exchange Commission (SEC). Copies are of such documents are available on the SEC's website, www.sec.gov. IEC undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Company Contact:
Frank C. Ingriselli
President, Indonesia Energy Corporation Limited
[email protected]
