Criterium Energy Ltd. (TSXV: CEQ) ("Criterium"), an independent upstream energy development and production company focused on energizing growth for Southeast Asia and its shareholders, is pleased to provide an operational update related to optimization and drilling activities in the Company's 100% owned and operated Tungkal PSC Indonesia (the "Tungkal PSC").
Intervention and Workover Activities Continue to Exceed Expectations
A key focus area for Criterium has been increasing production in the Tungkal PSC through the execution of low-cost well interventions and workovers in the Mengoepeh Field ("MGH"). As initially communicated on June 25, 2024, the workover activities have continued to exceed expectations, achieving rapid payback and incremental production with minimal costs.
Highlights of the program to date in 2024 include:
- Successful completion of 11 workovers, including two in March, five in June, and four in August.
- Generated incremental pre-tax cash flow of approximately US$1,500,000 from an investment of US$600,000, representing operating cash flow of approximately $0.02 per share on an annualized basis, directed to the workover program, with each workover program paying back costs within approximately 30 days.
- Incremental production from the workovers totals slightly over 220 bbl/d, contributing to current field production of over 950 bbl/d, and demonstrating the Company can bring incremental volumes on stream at less than US$3,000 per flowing barrel.
- Discovered additional gas in MGH-48 which allows for a sustained reduction in operating costs by offsetting the need for diesel to generate power. As of June 30, 2024, the Company has already reduced operating costs by 7% this year, with further updates on operating costs to be provided within Criterium's Q3 results.
- To date the Company has completed 11 of an expected 12-15 workovers in 2024, with the next tranche expected to be undertaken in Q4 2024. In addition to remaining on track to execute its robust workover program in 2024, the Company has commenced an operated infill drilling program, described more fully below.
- Further information on Criterium's workover program can be found in an updated presentation on the Company's website.
The successful workover program in August 2024 and completion of pump maintenance in the Pematang Lantih ("PLT") field in the Tungkal PSC has increased total production to approximately 950 bbl/d (September field estimate average of 925 bbl/d from the Tungkal PSC).
Criterium Spuds MGH-43, its First Operated Well in the Tungkal PSC, Onshore Indonesia
Criterium is pleased to confirm the spud of MGH-43, the first of two planned and operated infill wells to be drilled from a new well pad within the proven MGH Field which is situated on its 100% owned and operated Tungkal PSC (the "2024 Program").
The 2024 Program intends to access untapped areas in the MGH Field, targeting multiple pay zones within the Talang Akar Formation (the "TAF"). The Fluvial Deltaic reservoir within the TAF features 20 to 25 metres of net pay, with 10 to 20% porosity and 50 to 100 millidarcies of permeability on average, reservoir characteristics that are typically associated with higher productivity. The MGH Field and the planned infill locations are mapped on 3D-seismic and located less than 1 km from a central processing facility, mitigating risks related to potential deliverability and access to markets.
Approximately 300 bbl/d (150 bbl/d per well)1 of incremental light oil (35° API) production is expected to be added from the 2024 Program, which commands premium Brent pricing and benefits from existing infrastructure utilization. The volumes from both wells are expected to be on-stream in November of 2024, producing into nearby owned and operated facilities. By deploying a production strategy that requires lower capital, the total cost of the 2024 Program is estimated at US$4.5 million, including drilling, completion and tie-in.
Criterium will provide updates on the infill program, including preliminary results, as they become available.