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.