Australia's ASX-listed Bass Oil (ASX:BAS) has a focus, along with its Indonesian-based field teams and partners, on expanding onshore oil production from its holdings in Indonesia's prolific South Sumatran Basin. The principal asset is a 55% Operator interest in the long-life Tangai-Sukananti licence hosting multiple in-field exploration & production options.
Cash position to US$0.99 million as at 30 June 2018
Net production for June quarter totalled 25,580 barrels
Net oil sales for June quarter totalled 25,470 barrels1
Remediation program underway to address scale and pump problems at production wells as well as planned upgrade works expected to double future production from two existing production wells
Two highly prospective field development targets identified for drilling program expected to commence in the December quarter 2018
Bass Oil Managing Director, Mr Tino Guglielmo:
“Bass continues to work towards additional future upside with a focus on the completion of a suite of initiatives infield and the planned drilling of two new prospective targets within the existing KSO. Though June production has been impacted by recent scale and pump issues, Bass has made progress towards its production and optimisation plans, as well as its exploration, development and project partnering strategies for the remainder of calendar 2018. Bass continues to look for acquisition and partnership opportunities to add to our maiden production assets. Ideally, any such growth would involve stranded or dormant oil assets close to our existing infrastructure in which our highly experienced on-ground field teams are already operating in South Sumatra.”
Aggregate production for the June quarter declined on March primarily due to the scale formation in Bunian 3 well and the pump wear on the Bunian 1 sucker rod pump noted in the June Operations report. Bass is planning to replace the Bunian 1 pump with an Electric Submersible Pump (ESP) during the September Quarter. The ESP is expected to significantly increase the offtake from this well, increase pump reliability and run life. The Bunian 3 well has returned to production in July after a partially successful scale clean out utilising a wireline unit, with further remediation of the well with a coiled tubing unit to address the remaining scale buildup.
Bass produced 25,580 barrels of oil (55% basis), a decline of 6.6% from the previous quarter. Quarterly oil sales declined 9.5% to 25,470 barrels of oil net to Bass. The Company realised an 11% increase in oil prices, noting an average oil price received for the June quarter of US$68.11.
Remediation and Upgrade Program, Bunian 1 and Bunian 3 Production wells:
Following Bass' Optimisation program in the March quarter, two producing wells require remediation to returnto full production capacity as detailed in the ASX release from 20 July 2018, ‘Onshore Indonesian Oil OperationsUpdate – June 2018'.
The Bunian 1 sucker rod pump is showing signs of pump wear. Bass has progressed toward installation of an Electric Submersible Pump (ESP) to replace the sucker rod pump during the September quarter at Bunian 1. The pump is expected to significantly increase the offtake from this well, increase pump reliability and run life.
The Bunian 3 well production has been impacted by scale formation in the wellhead and the upper section of the wellbore. Works were undertaken during June to perform a scale clean out. Production continues to be impacted by ongoing scale buildup following the initial clean out with further remediation works to address the scale issue planned in the September quarter.
Bass' detailed development planning and approvals process continues for the drilling program expected to commence in the December 2018 quarter. The scope of the first phase of the program includes the drilling of up to two development wells, at Bunian 5 and Tangai 5.
It is expected that the drilling of these two proposed development wells will significantly increase the production capacity of the Tangai-Sukananti field as well as increase developed reserves.
Planning work for the upgrade of the Bunian and Tangai production facilities continues. A facility upgrade is required to process the additional fluid production anticipated following the completion of the drilling phase of the work program.
As at 30 June 2018, Bass cash reserves were US$0.99 m.
The cash position in the June quarter includes the second acquisition settlement payment to Cooper Energy (ASX: COE) of A$500k (US$386k). The remaining two acquisition settlement payments have been deferred six months respectively as per the release dated 2 July 2018, ‘Bass Oil extension of acquisition settlement terms with Cooper Energy'.
Under the agreed new payback terms, the timetable for a third payment of A$500,000, due 30 September this year, has been deferred until 31 March next year. The fourth and final payment of A$770,000, due to be paid by Bass to Cooper Energy by 31 December this year, has now been deferred until 30 June 2019.
The extension of the settlement will allow Bass to commence the development drilling program at the Bunian field without the need to raise additional capital.
Bass continues to evaluate a number of onshore Indonesian acquisition targets, particularly those situated in close proximity to its existing production infrastructure, as the Company looks to add additional prospective oil properties to its portfolio during 2018.