Medco Prepares Production Testing of Sekayu CBM Project - The Indonesia Today

Medco Energi is mobilizing a workover rig to the CBM-SE-02 well at the Sekayu coalbed methane exploration project in South Sumatra, Indonesia.

CBM Asia Development Corp told TSX Venture yesterday that Medco, partner and operator of Sekayu CBM, plans to install a downhole pump and zone isolation packer to dewater the Palembang B & C and Pangadang A coal seams, providing data on deep-radius reservoir permeability and water composition.

Medco also has contracted Weatherford International to conduct gas saturation testing at this well. Later in March, Medco plans to begin coring the coal section for gas content and permeability testing in the three other CBM test wells located in the deeper portion of the Sekayu Project.
CBM Asia has entered into a binding letter of intent to acquire a participating interest in a production sharing contract (PSC) for CBM on a 58,349 hectare block located in the South Sumatra Basin where initial exploration drilling of a production test well commenced in the second half of 2009.

The Company has committed to fund an initial US$3.25 million in exploration expenditures on the Sekayu PSC to prove reserves and submit a Plan of Development to the Government of Indonesia. Sekayu Block Interests of the Company, Ephindo and Batavia Energy are held in South Sumatra Energy, Inc. The Company also has an 18% net working interest in a PSC for CBM on a 76,000 hectare block located in the Kutai Basin of East Kalimantan.