Perth-based oil and gas company Lion Energy (ASX: LIO) has confirmed the Oseil oilfield in East Indonesia houses significantly higher reserves than originally anticipated, following a reserves and contingent resources report by a US-based petroleum consultancy.
Houston-based firm Miller and Lents completed the report in December on behalf of the Seram (Non-Bula) production sharing contract (PSC), located onshore Seram Island, with Lion holding a 2.5% interest.
The report noted a material increase in Oseil’s gross 2P (proven and probable) reserves to 4.37 million barrels – a jump of 203% on the 2.776 MMbbl reported by Lion in December 2019.
Lion’s share of the upgraded reserves is approximately 109,000 bbl.
Gross 3P (proven and probable plus possible) reserves have increased to 6.508 MMbbl, from 4.181 MMbbl reported in December 2019.
The “possible only” category in Miller and Lents’ report was 2.161 MMbbl compared to 1.405 MMbbls previously reported by Lion – an increase primarily due to the additional planned Oseil-23 well for testing a potential field extension in the Oseil-2 Block area.
Gross 1P (proven and developed) oil reserves for the Oseil area at December 2020 have been estimated at 1.542 MMbbl, compared to 0.5 MMbbl reported by Lion in December 2019.
The increase is believed to be the result of steady production during 2020 with 630,000 bbl produced at an average 1,726 bbl of oil per day.
A contributing factor was the impact of the Oseil-29 well which was drilled last May and commenced production later that month, outputting 53 MMbbl by year end.
Additionally, the success of a water shut-off operation at the Oseil-28 well early last year – which involved setting cement plugs and isolating deeper water producing zones – also helped boost production.
Lofin gas field
Miller and Lents’ report included a volumetric assessment on resources within the Lofin gas field, which has been considered the largest onshore gas discovery in Indonesia since the early 1990s.
The field was discovered with Lofin-1 in 2012 and successfully appraised three years later with Lofin-2, confirming highly significant gas resources in the Jurassic age Manusela formation carbonates.
The volumetric assessment confirmed the highly material discovery has recoverable contingent resource estimates of 752 billion cubic feet of gas (1C); 1.45 trillion cubic feet (2C); and 1.764 Tcf (3C).
Lion’s share of these estimates is 18.8 Bcf, 36.3 Bcf and 44.1 Bcf, respectively.
The new figures compare to previous estimates in a 2015 independent expert report of 879 Bcf (1C) and 2.02 Tcf (2C) of gas.
Category 3C resources were not estimated at the time.
Lion said the key difference between both sets of figures was a lower 2C gas recovery factor estimate (55% compared to the previous 70%) as well as more conservative assumptions on the interpretation of the Lofin structure.
“While the Lofin field is clearly a highly significant gas and condensate resource, there is still considerable uncertainly on its volume potential,” the company said.
“Planned work by the [Seram] joint venture includes further testing of the Lofin-2 well and also 3D seismic work to help more accurately define the resource potential.”