Jakarta-headquartered independent Indonesia Energy Corporation (IEC) is preparing by the end of May to bring on stream its latest successful oil exploration well at the producing Kruh block onshore Indonesia.
IEC recently discovered oil with its Kruh 27 well, the first of two back-to-back probes it is drilling during the first half of this year on the 63,000-acre block.
The Kruh 27 well, which was spudded on 7 April, reached a total depth of 3359 feet on 9 May. The well encountered approximately 132 feet of oil sands were encountered between depths of 3058 and 3190 feet.
This oil-bearing interval in the Kruh 27 well was 14 feet thicker and larger than anticipated, meaning that the total reserve potential for Kruh 27 could be larger than anticipated, said IEC without revealing any amounts.
"Our results at Kruh 27 reinforce our belief that Kruh block is a world class asset that should significantly grow our cash flow as we drill additional wells and seek to maximise returns on our investments and grow shareholder value,” said IEC president Frank Ingriselli.
This well took 32 days to reach TD, fewer than the 45 days earlier budgeted. The drilling rig will now be moved to the Kruh 28 well location.
IEC has plans to drill two further wells this well on the Kruh block following the initial back-to-back exploration wells. This first of these two new wells is now expected to be spudded in July or August with the likely second well to be drilled before the end of the year.
The operator’s aim to complete 18 new production wells on the field by the end of 2024.
Each of these new wells is expected to average production of more than 100 barrels per day of oil over the first year of production, and each well will cost approximately $1.5 million to drill and complete.
Based on the terms of IEC’s contract with the Indonesian government and an oil price of $90 per barrel, each well is expected to generate $2.4 million in net revenue in its first 12 months, which would be enough to recover the cost of drilling the wells in the first year of production.
IEC is already producing from five wells on the Kruh block on the island of Sumatra.
“[We are also] moving forward during 2022 with testing and other developmental activities at our potential billion-barrel equivalent natural gas 1 million-acre Citarum block [onshore Java], where the previous operator drilled a few gas discoveries,” added Ingriselli.
IEC is headquartered in the Indonesian capital and has a representative office in Danville, California, in the US.