Kutai Basin
On January 17, 2007, the Company entered into the Kutai Participation Agreement with Ephindo-Ilthabi CBM Holding Inc., ("Ephindo-Ilthabi") a subsidiary of Jakarta-based PT Energi Pasir Hitam Indonesia ("PT Ephindo") and Far East Methane, LLC ("Far East") of Denver, Colorado, to explore and develop potential coalbed methane reserves within the Kutai Block in the Kutai Basin, East Kalimantan, Indonesia. Under the Kutai Participation Agreement signed January 17, 2007 and amended April 18, 2008, the Company has a right to earn an 18% participating interest on the 76,000 hectare Kutai-West Block. On November 13, 2008, the Company and its partners were awarded a PSC on the Kutai-West Block. On June 28, 2010, the Company announced that Kutai West Inc., jointly owned by Ephindo-Ilthabi and CBM Asia, on a 60/40 basis, entered into a Joint Operating Agreement with operator Newton Energy CBM Limited ("Newton Energy") to commence exploration and development under the Kutai West PSC.
On June 23, 2010, the Company announced that it had entered into a Joint Acquisition Agreement with Newton Energy and PT Ephindo, to participate jointly in the evaluation of prospective coalbed methane resources on a second block in the Kutai Basin, the 56,300 hectare Kutai II Block. CBM Asia holds 28% participating interest in the Kutai II Block.
Under the terms of the original participation agreement signed January 17, 2007, the original Kutai Block covered 83,066 hectares (830.66 km2) with the Company having the right to earn up to 40% working interest in the project area. On April 18, 2008, the Kutai Participation Agreement was amended to include additional areas in and around the Kutai Block held by PT Energi Pasir Hitam Indonesia, a third party coal contract holder. By amending the original Kutai participation agreement, Kutai Block area was expanded into two distinct blocks as follows:
- Kutai-West - subject of the amended Participation Agreement which includes additional area which extends to the west and overlaps the original Kutai Block, approximately 76,000 hectares (760 km2). Under the amended agreement, the Company gave up 40% interest on a small area of the original Kutai Block, to gain an 18% interest in a much larger area; and
- Kutai II - the balance of the original Kutai Block, approximately 56,500 hectares (565 km2), where the Company retains a 28% participating interest.
Click to enlarge
Kutai Sweet Spots
In 2007, the Company commissioned a report on coalbed methane potential of the Kutai Block entitled "Desk Study Regional Reconnaissance of Coal Bed Methane in Kutai Basin, East Kalimantan Indonesia", by Jakarta-based technical consultancy, PT. Exploration Think Tank Indonesia ("ETTI"). Key findings of the study included:
- Oil and gas well logs from the Kutai Block area indicate that a relatively large number (10 to 30) of thin (3 to 15 feet) coal seams are spread out over the entire prospective depth interval from 500 to 4,000 feet.
- Information obtained from surface outcrops on the coal quality throughout the area in or near the Kutai Block, indicated that the coal has characteristics suitable for coalbed methane development. It is generally characterized as lignite to sub-bituminous and has low ash and CO2 content, with moderate water content.
- A compilation of data related to coalbed methane exploration, identified 16 coal sweet spots in the East Kalimantan area defined as a sedimentary rock volume which has coal seams at a targeted depth from 500 to 4,000 ft., with a maximum thickness of the individual coal seam of 3 ft.).
|
Coal Basin/ |
Coal |
Typical |
Typical |
Typical |
Typical |
Coal |
Average |
Gas |
San Juan |
HvB |
2,500 |
70 |
430 |
320 |
1.54 |
2,000 -- |
63 |
Powder River |
SB |
1,000 |
75 |
30 |
40-80 |
1.34 |
100-750 |
4 |
Uinta |
HvB |
3,400 |
24 |
400 |
160 |
1.54 |
690 |
20 |
|
|
|
|
|
|
|
|
|
Raton |
HvB |
2,200 |
25 |
400 |
160 |
1.50 |
300 |
6.5 |
Drunkard's |
MvB |
1,500-2,200 |
50 |
455 |
160 |
1.40 |
300-700 |
43 |
Bowen |
HvA |
1,800-2,200 |
30 |
360 |
500 |
1.25 |
1,200 |
18 |
Manville |
HvB |
3,300 |
20 |
300 |
160 |
1.30 |
1,600 |
11 |
STATEMENT ON NATIONAL INSTRUMENT 51-101
| File: | http://www.cbmasia.ca/i/pdf/Reports/51-101_April_30_09.pdf |
| 455 KB, approx. 1 minute, 26 seconds at 56.6Kbps |