News / Oil and Gas
CBM Asia and ExxonMobil Sign Farm-in Joint Venture in the Barito and Kutai Basins, Indonesia
CBM Asia Development Corp. ("CBM Asia" or the "Company") (TSX VENTURE:TCF)(US:CBMDF)(FRANKFURT:IY2) announces that it has signed a joint venture agreement with ExxonMobil to farm into four existing coalbed methane production sharing contracts (PSC) in the Barito Basin, South Kalimantan, Indonesia and acquire rights to farm into certain additional PSCs in the Kutai Basin, East Kalimantan. CBM Asia and ExxonMobil would hold equal ownership interest in each PSC.
The final terms and conditions of the proposed farm-in remain subject to the negotiation and execution of formal agreements between ExxonMobil and CBM Asia, as well as, among other conditions, government approvals.
Barito Basin. CBMA will acquire a 35% to 37.5% participating interests in four existing PSCs in the Barito Basin, South Kalimantan, Indonesia. CBM Asia and ExxonMobil plan to carry out certain pilot well test programs, and CBM Asia will fund certain operating costs associated with the PSCs.
Kutai Basin. In addition, CBM Asia will acquire the right to farm into 50% of ExxonMobil's future participating interest in certain coalbed methane PSCs in which ExxonMobil may acquire an interest located in the Kutai Basin, East Kalimantan. Subject to, among other things, government approval, upon ExxonMobil acquiring its participating interest in one or more of such existing and potential PSCs, ExxonMobil will farm out/assign 50% of its participating interest to CBM Asia.
"The Barito Basin holds approximately 100 Tcf of in-place1 CBM resources based on industry estimates," states CBM Asia Chairman Scott Stevens. "Deep coal deposits there are exceptionally thick, laterally continuous, gas-charged and have very simple structural conditions. Regional urban centers and the extensive coal mining industry provide near term gas monetization opportunities, while the coastal location near Banjarmasin and the Bontang LNG facility offers access to north Asian markets. CBM Asia considers the Barito Basin to be one of the world's best undeveloped CBM basins."
"CBM Asia's management and technical teams have developed excellent working relationships with ExxonMobil during the past several months," notes CBM Asia President and CEO Alan T. Charuk. "We believe ExxonMobil and CBMA will combine technical and financial strength with efficient operations to effectively develop these Barito and Kutai Basin CBM opportunities. The Barito Basin PSC's farm-ins and the potential Kutai Basin PSCs will result in a material increase in our Indonesian acreage position and potential recoverable resource. We now look forward to executing the operational phase of our strategy while farming out interests in certain majority owned PSCs to reduce our forward capex requirements."
1 Society of Petroleum Engineers Paper 88630 (not NI 51-101 compliant).
BPMigas. On November 13, 2012, Indonesia's Constitutional Court disbanded Indonesia's upstream oil & gas regulator BPMigas. Immediately following the Constitutional Court's ruling, Indonesian's President Susilo Bambang Yudhoyono issued a Presidential regulation and two ministerial decrees establishing SKSPMigas under the supervision of the Ministry of Energy and Mineral Resources (MEMR) to assume the functions of a regulator until a new, permanent body is formed under a planned revision of the 2001 Oil and Gas Law or until the formulation of a new law. In public statements the President assured foreign investors that all existing production sharing contracts (PSCs) will be honored. CBM Asia's operations in Indonesia continue as normally.
ABOUT CBM ASIA DEVELOPMENT CORP.
CBM Asia Development Corp. is a Canadian-based unconventional gas company with significant coalbed methane ("CBM") exploration and development opportunities in Indonesia. The Company holds various participating interests in five production sharing contracts (each a "PSC") for CBM in Indonesia. Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country's natural gas reserves Stevens and Hadiyanto, 2004). Since 2008 a total of 54 CBM PSCs have been granted by the Government of Indonesia, representing exploration commitments of well over US$100 million during the next 3 years. In addition to CBM Asia, other companies active in CBM exploration in Indonesia include BP, Dart Energy, ENI, ExxonMobil, Medco, Santos, and TOTAL. BP, ENI, and the Indonesian government have confirmed that commercial CBM production started in March 2011 from the Sanga-Sanga PSC and is being exported from the Bontang LNG facility. The Company trades on the TSX Venture Exchange under the symbol "TCF". www.cbmasia.ca
ON BEHALF OF CBM ASIA DEVELOPMENT CORP.
Alan T. Charuk, President & CEO
The gas in place estimates referred to herein have not be classified as "discovered petroleum initially-in-place" within the meaning of the Canadian Oil & Gas Evaluation Handbook (COGE Handbook). The term "discovered petroleum initially-in-place" is equivalent to discovered resources, and is defined in the COGE Handbook to mean that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. There are no assurances that any portion of the estimated gas in place resources will be discovered. Furthermore, the above estimates make no allowance for the recovery of the gas which will depend on, among other things, the reservoir characteristics encountered and future economic conditions.
This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. Specifically, the proposed farm-in arrangement with ExxonMobil referred to herein is subject to, inter alia, the negotiation and execution of formal agreements, governmental and third party approvals, satisfactory due diligence and available financing. There are no assurances that the Company will be successful in entering into formal agreements with ExxonMobil on commercially acceptable terms or at all. All of the forward-looking statements made in this news release are qualified by these cautionary statements and those made in our Canadian continuous disclosure filings available on SEDAR at www.sedar.com including our December 31, 2011 year end annual MD&A dated April 26, 2012 and second quarter 2012 interim MD&A dated August 28, 2012. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required under applicable securities legislation. This news release does not constitute an offer to sell securities and the Company is not soliciting an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
