CBM Asia Increases Indonesian Holdings

CBM Asia Development Corp. has acquired majority interest in two coal-bed methane production sharing contracts (PSC) in Indonesia.

The company has acquired a 70% participating interest is the 519-km2 Hulu PSC in Central Sumatra.  PT Samantak Mineral Prima holds a 30% participating interest. The block is adjacent to the Trans Sumatra gas pipeline and close to the Chevron-operated Duri oil field steam flood operation, a major gas consumer which offers premium gas pricing.

The Company has also acquired a 70% participating interest and operatorship in the 830-km2 Bentian Besar PSC in East Kalimantan. PT Ridlatama Mining Utama holds a 30% participating interest. The block is located west of the Company's Kutai West PSC holdings and the BP-ENI Sanga-Sanga PSC, which recently began selling CBM to the Bontang LNG facility for export

In addition, the Company has applied to the Indonesian government for extensions to both new blocks, which are anticipated to add a further gross area of 2,564 km2,

The transactions increasing CBM Asia’s total gross acreage in the country by 93% to 2,799 km2.

CBM Asia's Chairman Scott H. Stevens noted, "We are excited about the prospects for these two acquisitions, including the extensions under application at both blocks. Together with the extensions, these acquisitions exceed our previously announced LOI (May 12, 2011). The Hulu PSC in Central Sumatra targets coal seams that are age-equivalent to those at the Sekayu PSC, where the Company recently reported positive results. Drilling by other operators in East Kalimantan, particularly BP's recent confirmation of that they have achieved CBM-to-LNG export, four years ahead of Australia, confirm the CBM potential there. As operators of these two blocks we will be able to dictate the pace of exploration and development."

Source: CBM Asia