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Background

The North Ganal PSC is situated in the heart of the highly prospective deepwater Kutai basin, adjacent to proven fields with similar play elements. Makassar's deepwater trend is basinward of the prolific Mahakam Delta province which hosts in excess of 50 Tcf and 5 billion barrels of oil and gas reserves.

The North Ganal PSC was signed on 21 November 2011 by North Ganal Energy Ltd (NGE), a wholly owned subsidiary of BPE. NGE holds a 18.5% interest in PSC, with Statoil 26%, Ophir 18.5%, ENI 24.5% (Operator) and Engie 12.5%, each holding a respective interest.

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Seismic & Drilling Activities

The Company acquired 2500 kms of 2D seismic and 2,240 sq Km of 3D seismic in the North Ganal PSC over the past four years.

In the July 2012, one exploration well, Lebah-1, was drilled in the North Ganal PSC by ENI as Operator. This was the first of two largely carried wells planned to be drilled in the North Ganal PSC. The Lebah-1 well targeted a series of Upper Miocene - Pliocene deep water channel sands analogous to those found in nearby discoveries by ENI. Although Lebah-1 drilled over 800' of reservoir quality sands distributed over a number of intervals only one of the sands was hydrocarbon bearing. The Upper Miocene 11,500' sand had 12' of gas at the top of a 41' gross sand interval. The well was plugged and abandoned as a gas discovery.

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A second largely carried exploration well in the North Ganal PSC will likely be targeting significant resource potential in the deeper Middle Miocene sands.

Lebah-1 Discovered Gas - Possible Development Option

Depending upon future exploration success in North Ganal PSC, any possible future development of the Lebah-1 gas discovery will likely involve a tie-in to the Jangkrik deepwater gas development which connects back into existing infrastructure and the Bontang LNG plant. Bontang LNG contracts are indexed to oil price and the domestic market is also robust, supporting gas prices in excess of $6. 

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