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Oil & Gas

Canadian indie acquires E&P player with Indonesian assets

Criterium Energy has acquired Singapore based E&P player Mont D’Or Petroleum in a cash and shares deal that gives it 100% operated interests in two onshore production sharing contracts in Indonesia — Tungkal and West Salawati.

The Tungkal block onshore South Sumatra produces 1030 barrels per day of oil and has proven-plus-probable reserves of 4.6 million barrels of crude, while the West Salawati PSC in Southwest Papua province has current output of 20 bpd and hosts proven-plus-probable reserves of 100,000 barrels.

Canadian independent Criterium said the acquisition, which it described as “transformative”, would establish it as an operator in Southeast Asia while providing immediate production and operating cash flow.

Mont D’Or has a strong 15-year track record of safe operations in Indonesia and will provide Criterium with a reputable and talented operating and technical team from which to expand operations.

Criterium has already identified significant upside potential on the two Indonesian assets and plans to boost combined production to as much as 1600 bpd of oil by the first quarter of next year and further to as much as 2600 bpd by the end of the 2024 fiscal year, via infill drilling and workovers.

“With the recently announced 2042 Tungkal PSC extension, we intend to execute annual drilling programs to fully realise Mont D’Or’s potential to deliver long-term sustainable production growth within cashflow,” said Criterium chief executive Robin Auld.

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This extension is in the form of the gross split PSC, which has a favourable contractor take and income tax rate of 40% on net profits.

Under the new PSC term, Mont D’Or had committed to execute firm work commitments over the next five years which include geological and geophysical studies, seismic acquisition and two exploration wells.

The 2285-square kilometre Tungkal block contains the producing Mengoepeh and Pematang Lantih oilfields.

Robin Auld, CEO fo Criterium Energy. Photo: Criterium Energy

Mengoepeh was discovered in January 1997 and commenced production in 2004 reaching a peak rate of 2500 bpd.

Last year, two infill wells were drilled bringing the total development well count to 40, with 12 wells currently producing 430 bpd of oil and four non-producing natural gas wells. Criterium said it recognises additional potential above the proven-plus-probable estimates — which only equate to an 11% ultimate recovery — and intends to focus its efforts on workovers of bypassed pay, infill drilling and secondary recovery techniques.

Right off the bat, the new operator intends to drill three to four wells at Mengoepeh in the fourth quarter this year and the first quarter of 2024 and perform annual drilling.

The Pematang Lantih field was discovered back in 1939 although it did not come on stream until 2015, reaching peak output of 2000 bpd three years later.

In 2022, two wells were drilled bringing the total development well count to six with current production of 600 bpd of oil. Criterium has identified potential upside in converting former producing wells into water injectors to increase ultimate recovery from the relatively simple faulted anticline structure.

Oil produced from the Tungkal PSC is trucked to either the Gemah terminal (95 kilometres away) or the Tempino terminal (120 kilometres away).

Average operating costs, including transportation, last year were $25 per barrel, a large part of which are fixed. As production increases unit operating costs are expected to decrease, noted the new operator.

Additional gas prospects on the Tungkal block include Mengoepeh SE and Macan Gedang while further prospective structures have been identified on seismic.

Criterium intends to conduct technical and commercial feasibility studies to determine the potential for producing gas for internal use and sales to third parties.

West Salawati

The approximate 970-square kilometre West Salawati PSC onshore Salawati Island contains the Balladewa-A (BLL-A) oilfield, which is currently producing at the dizzy heights of just approximately 20 bpd from one well.

Mont D’Or has outstanding work commitments including two exploration wells to be drilled before 2026 on the West Salawati block for which the existing cost recovery PSC is due to expire in 10 years’ time.

“Fortunately, the prospectivity within the block is mature and contains the BLL-B, BLL-C, and BLL-F structures which can utilise existing infrastructure from the BLL-A field. In addition, the PSC contains large prospects located in the shallow water portion of the PSC, most notably prospect-3X,” commented Criterion.

The BLL-A1 oil discovery was made in 2015 and it came on stream three years later, albeit with a water cut of 70% to 80%.

“The source of water is unknown but may have been caused by a failure of the cement plug,” admitted the new operator.

Criterium is planning a workover in the fourth quarter of this year to add new perforations and limit water production.

The West Salawati PSC contains mature prospects in both the onshore and offshore areas of the block.

The offshore area of the PSC contains 15 prospects and leads and Criterium intends to conduct a detailed prospect and lead review and ranking in by the end of March 2024.

The company plans to farm-out these offshore prospects ahead of potentially spinning the drill bit.

Criterium is mulling a dual listing on the London Stock Exchange’s AIM market, alongside its current listing on the TSXV in Canada, Auld added.

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