CBM Asia Development Corp. (CBM Asia or the Company). CBM Asia’s strategic goal is to acquire, through joint ventures, farm-ins and PSC applications, a significant land position in Indonesia’s rapidly emerging coalbed methane industry with the potential to yield 10-15 Tcf of net recoverable resources.
The Company believes that Indonesia’s CBM industry continues to provide a unique investment opportunity. Acreage acquisition costs remain low at USD4.88/ acre, based on CBM Asia’s actual costs to date, whereas finding costs are some of the least expensive worldwide. For example, the demonstrated Sekayu PSC finding costs for CBM Asia and its partners were less than USD0.01/Mcf, a remarkably low figure which includes three test wells and the USD1.0 million signature bonus to the Indonesian government.
CBM Asia currently has interests in four PSCs (two of which are majority controlled and operated) and one PSC application (majority controlled and operated). The Company’s net acreage position is approximately 4,392 km2 (1,084,872 acres), including the pending Hulu PSC and Bentian Baser PSC area extensions (the “Total Net Acreage”). The Company is optimistic its current position can provide a substantial portion of its recoverable resource target.
On November 2, 2011 CBM Asia announced an NI 51-101 compliant recoverable unrisked gross prospective resource (best estimate) of 1.06 Tcf at the Sekayu PSC; net 254 Bcf to the Company. This interest represents a net area of approximately 139 km2 (34,400 acres) or less than 3.2% of the Total Net Acreage.
“The drilling results at our Sekayu and Kutai West PSCs, as well as those from other CBM operators and BP-ENI’s first commercial CBM gas sales to the Bontang LNG facility, provide strong indications that Indonesia’s CBM industry is likely to be large and successful” comments Alan Charuk, President and CEO of CBM Asia. “With the success at our second CBM block, Kutai West PSC, we are committed to seeking out and acquiring further CBM PSCs in order to achieve our recoverable resource target of 10-15 Tcf. Our current portfolio of four PSCs and one application provides a significant step towards that target.”
Mr. Charuk further added “with Indonesian CBM PSC’s offering favorable after-tax contractor take of approximately 45%, domestic gas prices in a favorable range of USD5.00-11.00/Mcf and LNG export prices of USD15.00/Mcf, combined with low acquisition and finding costs, we believe Indonesia’s CBM industry has the potential to generate significant returns for the Company.”