Nautec Energy Solutions (Nautec) was contracted to review the potential of Indonesian coal bed methane (CBM) permits in which Ephindo holds interests, in both South Sumatra and East Kalimantan.
Technical review of CBM licences in Indonesia, which are:
- Sangatta West
- Kutai I and II
- Sangetta I (remainder)
- Kutai Timur (Kutai East)
- Melak Mendung 1
- South Sumatra:
KUFPEC required a Technical Due Diligence on resource quality, profiles, and costs, with limited information to review and data of questionable quality. Hence, the review was limited in scope and it was not anticipated that dynamic modelling would be undertaken. It should be noted that it may not be possible to do more than comment on well performance. The scope was later modified to include a Reservoir Engineer and simulation.
The data quality and knowledge of the permits was often very limited. Raw data used for due diligence included pdf logs for some wells, core data and some DST reports. No digital seismic was available, however PowerPoint images of selected lines were provided, which then allowed for depth and structure maps to be viewed/accessed by Nautec. Dataroom access was limited to reports and presentations:
- NSAI statements provide reserve and resources (these are summaries only – not full report)
- RISCO Energy presentation (presented at CBM Indonesia 2012 conference)
After review of the available dataset Nautec concluded that the exploration strategy undertaken by the companies (Ephindo and Dart) is generally very good:
- On target in most permits to meet commitment
- Gathering appropriate and sufficient data, though more needed
- Gas content, gas compositions, isotherms
- Logs, permeability
- Developing comprehensive pilot programs and flowing water and gas from wells (extended flows required – revise well completion strategy)
- Certifying resources
Sangatta West Block appears to be progressing in a similar way to Australian experience (though the area is small).Sekayu is challenged by low gas contents and very high permeability.
Kutai I and II could be limited by coal volume and thick coals can be in direct contact with permeable sandstones.
Sangatta I (remainder), Kutai Timur and Melak Mendung have very limited data to assess – shallow coals.
Ephindo is in the trial and error phase of pilot production – still exploration.