Friday 15th January 2021
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New Zealand Oil & Gas subsidiary, Cue Energy Resources (ASX: CUE), has provided an update that commercial production of oil has commenced from the PB field in the Mahato PSC in Indonesia and the dispute between Cue and the Joint Venture partners has been settled.
Cue has a 12.5% interest in the Mahato PSC. New Zealand Oil & Gas has a 50.04% interest in Cue.
Oil Production from Mahato PSC
Commercial production of oil has commenced from the PB field in the Mahato PSC in Indonesia and the dispute between Cue and the Joint Venture partners has been settled. Cue Mahato Pty Ltd (Cue), a 100% owned subsidiary of Cue Energy Resources Limited, holds a 12.5% participating interest in the Mahato PSC.
The PB-1 well is producing at approximately 600 barrels of oil per day. The oil is processed and exported through existing third party facilities. A workover of exploration well PB-2 to bring it into production and the drilling of three further development wells is expected to commence during the current quarter.
The PB-1 and PB-2 wells were drilled as exploration wells in late 2019 and early 2020.
Cue and the Mahato PSC joint venture partners have agreed on a settlement to the dispute relating to the PB-1 and PB-2 wells. As part of the settlement, the Operator will issue Cue with a cash call for approximately US$300,000 for the PB-2 exploration well. Additionally, Cue will pay US$380,000 to the joint venture partners, of which US$111,000 will be paid from Cue’s cash reserves, with the remainder to be paid from Cue’s share of the PSC performance bond, which is currently being held by the Operator. All payments are expected to be settled by the end of January 2021.
Cue has previously paid for its participating interest in the field infrastructure, the PB-2 well workover and three upcoming development wells.
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