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Wednesday, 11 March 2015 09:00

Cue acquires SPC Mahakam Hilir

Australian-owned Cue Energy Resources completed the acquisition of 100% of SPC Mahakam Hilir Pte Ltd., which holds 60% of the Mahakam Hilir product sharing contract (PSC) in Kutei basin, onshore Kalimantan, Indonesia. Cue now holds a 100% interest in the PSC.

As part of an internal review of permit data, the company also identified a drill-ready oil prospect, Naga Selatan-2 (Southern Dragon), which has encouraged Cue to move to a 100% interest in the permit.

This oil prospect could contain 25 MMbbl of recoverable oil and lies along trend from the large Sei Nangka and South Pelarang oil fields, estimates Cue. The multiple targets are shallow, located at approximately 1000-3000ft TVD.

Drilling program preparations have commenced and the well is planned for 3Q 2015. This marks Cue’s first entry as a drilling operator.  

Last month, Cue Energy’s board rejected NZOG Offshore’s proposed on-market, unconditional takeover to acquire all of the company’s shares that it does not already own, for an estimated US$54.5 million (A$69.8 million), valuing each share at $0.08 (A$.10). Cue is urging shareholders to reject the offer as well.

According to Cue Energy, the company has an existing, clear strategy for its business, which is designed to maximize value for all shareholders and its board believes that its strategy is superior to NZOG Offshore's announced intentions.

In December, NZOG Offshore made an off-market purchase of 19.99% of Cue Energy from Todd Petroleum at the same price, for a total value of $10.9 million (A$13.96 million). 

Image: Mahakam Hilir PSC

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Cue urges NZOG rejection

Tuesday, 10 March 2015 00:00

Oilex updates Indian assets

Oilex Ltd. plans to drill four new wells in the Cambay Field, located in the State of Gujarat, India.

Approved by the Cambay Field joint venture (JV) and the government of India, the work program includes two firm wells and two contingent wells.

Scheduled to run in the course of two years commencing 2015, the first well is expected to spud late this year, subject to the finalization of funding.

Tendering activities are currently underway and the company expects to take advantage of the recent decrease in global oil and gas activity to achieve a reduction in drilling and other costs.

“Oilex is very pleased with the strong support of the Government of India and rapid approval of the 2015/16 work program for the Cambay Field after the successful proof of concept activities at Cambay-77H,” said Ron Miller, managing director, Oilex.

“We are moving forward with the planning and preparation for the work-over and drilling campaigns both of which target increasing production, cashflow and reserves from our India assets.”

Construction of production facilities at Cambay-73 is 50% complete and the JV plans to commence a five well work-over campaign to boost oil and gas production in 2015.

The updated Independent Reserves and Resource statement comprising of production data for the past 3 years, as well as data for Cambay-77H and Cambay-73 is scheduled for completion April 2015.

Engineering studies to examine the cost and schedule parameters of a range of throughput sizes as part of the development planning for the field and to determine temporary production facilities for Cambay-77H are currently underway.

The JV also welcomed Jayant R. Sethi who assumed the role of head of India assets in charge of daily operations. A trained geologist, Sethi brings technical and operational leadership experience to the position.

“The strong growth outlook for the Indian economy together with a significant shortage of gas and substantial gas demand provides a robust environment for future gas prices which helps to shield Oilex from the full impact of low oil prices,” commented Miller.

Design engineering work for gas production facilities required for the group’s Bhandut-3 field is now at 40% completion.  

Image: Cambay Field

Monday, 09 March 2015 22:25

India to add 103 GW of coal power

Clean coal capacity is expected to increase by approximately 103 Gigawatts (GW) between 2016 and 2025, as the country seeks to meet its electricity demand.

Coal is India’s primary source of energy for it accounts for more than half of the country’s energy needs. It will remain predominate to the country’s energy mix with the power sector making for the majority of coal consumption.

In 2014, coal was the leading source of power generation with 160 GW, accounting for 59% of installed capacity and this is expected to almost double by 2025, according to GlobalData.

While India’s clean coal installations are in the nascent stages, many recent ultra-mega power projects have adopted supercritical (SC) technology, while future SC and ultra-supercritical installations will drive capacity additions over the forecast period.

India’s increasing population and industrialization, improved standard of living and robust economic growth are all pushing up its demand for electricity, said Sowmyavadhana Srinivasan, GlobalData’s senior analyst covering power.

“Between 2013 and 2014, India experienced a deficit of 4.5% in terms of the electricity supply available to fulfill peak demand.

“The country is not fully electrified and is subject to a large number of power cuts and power reliability uncertainties. In order to resolve this, India urgently requires many new installations, with coal a significant contributor,” he said.

However, the growth in India’s clean coal market could be limited by fluctuations in the international coal market and the domestic government’s increased emphasis on the use of cleaner fuels for power generation.

India has a policy that most mega power plants have to secure coal imports internationally, said Srinivasan, and this means that if there is a shift in the international coal community, it will affect the coal power plants in India, which adds to the risks involved with setting them up.

“Furthermore, under the National Action Plan on Climate Change (NAPCC), India aims to generate 15% of its electricity from renewable sources by 2020. As a consequence, alternative energy sources, such as wind and solar power, may impact the adoption of clean coal technologies,” he said.

According to the U.S Energy Information Administration (EIA), in 2014 the Indians had approximately 5.7 billion barrels of proven oil and 47 trillion cubic feet of natural gas reserves.

Over the years, domestic production has not kept pace with demand, thus the country heavily relies on crude oil and liquefied natural gas (LNG) imports. It is the fourth largest energy consumer in the world after China, the United States and Russia. 

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