News & Reports
Quarterly Activities Report Q3 2017
Lion continues growth strategy in improving investment climate
- New business focus continues with improved contract terms announced by the Indonesian Government
- Gross production from the Seram PSC for the quarter was 233,081 barrels (average 2533 bopd)
- Crude oil lifting of 350,186 bbl (8755 bbl net to Lion) completed on 9 September 2017
- Exciting Amanah Timur-2 well set for 1Q-2018, avoiding wet season
Lion Energy Limited (“Lion” or “Company”) is pleased to report continued good progress on advancing new business activities, spurred on by the attractive new Production Sharing Contract terms announced by the Indonesian Government. Production continued from the Oseil oilfield in the Seram PSC, with revenue received in the quarter from the crude oil lifting in early May of US$464,400 prior to First Tranche Petroleum payment.
In a major positive development for the Indonesian oil and gas industry, the government announced material improvements to its new “Gross Split Production Sharing Contract (PSC)” regime. For new contracts and certain PSC renewals, this essentially replaces the existing traditional PSC with a more attractive system carrying improved fiscal terms. This is effectively a royalty/tax system which should significantly reduce the compliance burden on operators.
Production from the Seram PSC averaged 2533bopd for the quarter (63 bopd net to Lion prior to deducting government take). Gross crude oil production for the quarter was 233,081 bbl (5499bbl net to Lion). A lifting of 350,186bbl was completed on 9 September 2017.
In the South Block A PSC (Lion 40.7%), the Joint venture advanced appraisal drilling plans, building on results and lessons from the Amanah Timur-1 discovery well. The appraisal well spud is planned for 1Q-2018 following the wet season.
At the end of the quarter, the Company had cash of US$0.864mil, this excludes the lifting receipts of US$362,952 received post quarter end on 17 October 2017.
Lion’s CEO, Kim Morrison, noted “Lion continues to make good progress on building our position in Indonesia. We are pleased with the South Block A PSC appraisal plans now set for the first quarter of 2018, as this avoids the wet season in the North Sumatra area. Improvement to the new PSC terms signed by the Indonesian Government during the quarter are welcome and are a positive step for renewed interest in the oil and gas sector.”