Gulf drills prolific Indonesian gas well

Gulf drills prolific Indonesian gas well

CALGARY (Reuters): Gulf Canada Resources Ltd. said on Thursday that a newly completed well in Indonesia flowed natural gas at the highest rate of any it has drilled in the South Sumatra region.

Gulf Canada said the Suban-4 delineation well, located on its Corridor Block production sharing contract area, flowed at a test rate of 80 million cubic feet a day from three different geological zones, a rate restricted by the test equipment. It also produced 420 barrels a day of condensate.

The well, operated by Gulf unit Gulf Indonesia Resources Ltd., broke a record set recently by its Durian Mabok-2 well, located 4 kilometers (2.5 miles) to the southeast of Suban-4, which tested at 58 million cubic feet of gas and 370 barrels of condensate a day.

Gulf's partners in the play are Talisman Energy Inc. and Indonesian state oil company Pertamina.

Gulf said the gas in the latest test contained low levels of carbon dioxide, similar to the 5.5 percent in its other wells in the Suban reservoir, meaning it will require minimal processing to meet a sales gas maximum of 5 percent.

"The results of this test and the information from the Durian Mabok-2 well demonstrate the high productivity of the Suban reservoir," Gulf Indonesia vice-president Bob Klassen said in a statement.

"This productivity combined with the low (carbon dioxide) content means development costs to bring the gas to market could be $1 per (barrel of oil equivalent) or lower with operating costs of less than 50 cents per boe during the production phase."

The company said it would start an extended production test to glean more information about the reservoir and start drilling another well, Suban-5, in the next few days.

Gulf Canada shares on the Toronto Stock Exchange closed off 20 Canadian cents at C$6.50 on Thursday, while in New York its 72- percent owned Gulf Indonesia subsidiary was off 13/16 to $8-1/8. Talisman ended down C$1.35 to C$46.65 in Toronto.