Cue buys out PetroChina in Indonesian PSC

Cue Energy Resources Ltd., Melbourne, has completed acquisition of PetroChina’s 60% interest in the Mahakam Hilir production-sharing contract in Indonesia’s Kutei basin.

Cue Energy Resources Ltd., Melbourne, has completed acquisition of PetroChina’s 60% interest in the Mahakam Hilir production-sharing contract in Indonesia’s Kutei basin.

The company is preparing to drill $5 million (Aus.) shallow well called Naga Selatan-2 (Southern Dragon) in the area—its first as operator.

Cue has been in the PSC since 2011 and has participated in three wells. All found hydrocarbons, but downhole problems have prevented the establishment of a commercial flow rate so far.

PetroChina’s 60% gives Cue 100% of the permit. The purchase price was not disclosed.

Cue will carry the cost of the new well from its cash reserves of $37 million (Aus.), which has been boosted by the recent sale of its Papua New Guinea interests in Gobe field.

Naga Selatan-2 is targeting a prospect with potential for 25 million bbl of oil at depths of 1,000 m in multiple reservoir zones. It is on trend with Sei Nangka and South Pelarang oil fields. The Naga Seletan-1 well was drilled in 2012, but mechanical problems downhole prevented testing.

Separately, New Zealand Oil & Gas Ltd. has increased its holding in Cue to 27.03% from 19.9% as part of its hostile takeover bid.

NZOG has said it will be satisfied with 30% ownership of Cue. The offer of 10¢ (Aus.)/share will close on Mar. 27.

More in Companies