Pete starts RI drilling

Pete starts RI drilling

LONDON (Dow Jones): UK-based Dana Petroleum PLC said Thursday that in partnership with Premier Oil PLC, Amerada Hess Corp. (AHC) and Gulf Resources Ltd., it has begun drilling on the Pangkah production sharing contract (PSC) area in the East Java Sea, Indonesia.

The prospect is located in a proven hydrocarbon basin, with "substantial reserves potential," Dana said. It is located in 60 feet of water and is 7 kilometers from the East Java coast, close to the city of Surabaya.

Dana said that through farm-out agreements with Gulf Indonesia, it is carried on the drilling costs of the Ujung Pangkah well, but will retain a 12 percent interest in any commercial discovery. Dana also has no financial exposure to the cost of a second well in the 3,500 square kilometer Pangkah PSC, but will likewise retain its 12 percent interest in the whole contract area.

In Natuna, in which Dana also has a position, seismic processing is currently underway and a well is to be drilled next year. This PSC is located between discoveries offshore Malaysia and the producing Anoa field operated by Premier.