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Long-Awaited Drilling in Sumatra Commences

Source: Streetwise Reports

 

August 4, 2017 (Investorideas.com Newswire) A Calgary-based oil and gas exploration and production company announced that drilling has begun on its Sumatran property.


Pan Orient Energy Corp. (POE:TSX.V) announced on July 31 that drilling commenced on the AYU-1X exploration well at East Jabung on the island of Sumatra in Indonesia. Pan Orient has a production sharing contract (PSC) with Talisman Energy, a subsidiary of Repsol, to explore the property. Pan Orient holds a 49% non-operated interest and Talisman is the operator with a 51% interest.

Pan Orient stated that it expects the well to reach total depth around Aug. 31.

In the company's presentation for the June 13 Annual and Special Meeting, Pan Orient stated that the project has the "best fiscal terms in Indonesia with a 65%/35% after tax & cost recovery split in favor of the GOI [Government of Indonesia] for oil (60%/40% for natural gas) after POE recovers its costs," and it is "carried up to a well cost cap of the first $10MMusd on the first high impact exploration well (AYU-1X)."

Chen Lin, author of What is Chen Buying? What is Chen Selling? newsletter, wrote on July 31 that he sees this as an "exciting and potentially once-a-lifetime opportunity. . .I like the risk-reward." Lin explained that in Sumatra, "gas commands a premium because of the undersea pipeline to Singapore, where it carries one of the highest natural gas prices in the world. It is very reasonable to assign $1-2/mcf for the gas resource because the gas price there is close to double digits. Given 6:1 gas to oil ratio, it is about the $10/BOE."

Pan Orient also has operations in Thailand and Western Canada.

Read what other experts are saying about:

Disclosure:

1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, securities of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.

2) Pan Orient Energy Corp. is a sponsor of Streetwise Reports. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Pan Orient Energy Corp., a company mentioned in this article.


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