Indonesia Energy Corporation (NYSE American: INDO) ("IEC"), an oil and gas exploration and production company based in Indonesia, provided an operational update and announced that it has completed the recording of 29 square kilometers of new 3D seismic at its 63,000 acre Kruh Block. IEC will now commence processing and detailed interpretation of the seismic data to optimize the selection of drilling locations in its Kruh, North Kruh and West Kruh fields. Importantly, IEC anticipates that the results of this seismic work may allow IEC to drill new production wells at Kruh Block by the end of 2024.
Additionally, IEC announced that it expects to commence operations before the end of the year at its 650,000 acre Citarum Block where reserves could potentially exceed a billion barrels of oil equivalent.
As the operator of the Kruh block, IEC’s 3-D seismic program is strategically focused on existing proved reservoirs in the Talangakar and Lemat formations, as well as the very large and promising shallow oil/gas zones in the K-28 well discovered by IEC in 2022.
The newly-acquired high quality three-dimensional seismic data will enable the identification of additional locations of proved undeveloped reserves and resources. This, in turn, will pave the way to prioritize the sequence of upcoming drilling locations as IEC recommences drilling operations at Kruh Block. Preparations for the new drilling operation are underway, with plans to drill the first well in the fourth quarter of 2024 after the evaluation of the new three-dimensional seismic data is completed.
IEC announced in September 2023 that its joint operation contract with Pertamina, the Indonesian state-owned oil and gas company, covering the Kruh Block was extended by 5 years from May 2030 to September 2035. Kruh Block covers approximately 63,000 acres and is located onshore on the Island of South Sumatra in Indonesia.
The amended joint operation contract has the following key terms:
- The amended contract increases IEC’s after-tax profit split from the current 15% to 35%, for an increase of more than 100%.
- In addition, given the 5-year extended term of the contract, the amended contract is expected to increase IEC’s proved reserves at Kruh Block by over 40%.
- Furthermore, given the increased profit split, IEC’s anticipated net cash flow calculations based on its Kruh Block development plan are expected to increase by over 200% versus IEC’s anticipations under the prior contract.
At Citarum Block, IEC’s recent receipt of government environmental permits paves the way to expeditiously commence seismic operations, with plans to commence drilling next year. As previously reported, IEC’s estimates are that the Citarum Block has prospective oil-equivalent resources of over one (1) billion barrels of oil.
Mr. Frank Ingriselli, IEC's President, commented "We are very excited about the completion of the acquisition and commencement of interpretation of the new seismic data on our Kruh which bodes well for our company as we look to recommence drilling at Kruh Block in late 2024. We continue to believe that Kruh Block is a world class asset which has been enhanced by the significant improvements in our economics from the 2023 contract extension with the Indonesian government. These operations should positively leverage what we have learned from our previous discoveries, including our 2022 gas discovery, and determine the best locations to re-start our continuous drilling campaign.”
“Additionally, we have now also moved forward with activities at our potential billion-barrel equivalent natural gas 650,000-acre Citarum Block, where the previous operator drilled several 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," concluded Mr. Ingriselli.