SUMMARY OF ACTIVITIES
$3.9 million net cashflow for the quarter, increasing cash to $20.86m
Paus Biru -1 Exploration well commenced operations
Total net production of 27,270 barrels (bbls) of oil and 383 million cubic feet (mmcf) of gas.
$6.86 million cash received from oil and gas sales, $0.38m received as an initial payment of water injection insurance claims from Maari field.
$20.86 million cash and no debt
• Indonesia: The Paus Biru -1 exploration well commenced operations subsequent to the Quarter end on 18 October 2018.
Step Change Opportunities
• Australia: WA-359-P Suspension and Extension application was approved for 12 months until 25 April 2019.
Production & Financial Summary
• $6.86 million cash received comprising of: 31,025 bbls of oil sales, down from the previous quarter due to timing of Maari liftings, at an average price of US$73.11/bbl; gas sales of 382 mmcf at an average price of US$7.23 per thousand cubic feet (Mcf).
• Production expenditure was lower due to timing of Joint Venture payments.
PRODUCTION - NEW ZEALAND
Cue Interest: 5% (Cue Taranaki Pty Ltd)Operator: OMV New Zealand Limited
Maari and Manaia Fields
A planned annual maintenance shutdown was successfully completed by the start of the quarter, with production back online during the first week of July.
During the quarter the planned conversion of the MR5 production well to a water injector to provide pressure support for the Maari Moki reservoir was undertaken. The Operator is currently testing the water injection rate, along with the MR1 well, the other field water injection well, to optimize production.
Workovers were completed on both MR3 and M10 wells during September after they experienced Electric Submersible Pump (ESP) operating issues. Both wells were back in production by the end of the quarter.
PRODUCTION - INDONESIA
Cue Interest: 15% (Cue Sampang Pty Ltd)
Operator: Santos (Sampang) Pty Ltd (an Ophir Energy Group Company)
The Paus Biru-1 exploration well commenced operations subsequent to the Quarter end on 18 October 2018.
The well is being drilled by the COSL HYSY 937 Jackup drilling rig in 30m water depth and is expected to take 2 weeks to reach TD of 650m Total Vertical Depth Subsea (TVDSS).
The primary objective of the Paus Biru-1 well is to test the Early Pliocene Mundu Globigerina limestone reservoirs in the Paus Biru structure which is defined by 3D seismic data as a 4- way dip closure with direct hydrocarbon indications. The secondary objective is the overlying siltstones within the Paciran Formation which has proven productivity in the equivalent section in the Oyong field.
On 6 September, Ophir Energy announced the completion of the acquisition of Santos' Asian assets, making Ophir Energy the new parent company of Santos (Sampang) Pty Ltd, the PSC operator.
EXPLORATION - AUSTRALIA
Cue Interest: 100% (Cue Exploration Pty Ltd)Operator: Cue Exploration Pty Ltd
WA-359-P contains the Ironbark prospect, a large and exciting Deep Mungaroo gas target close to the existing NWS LNG infrastructure.
On 9 August 2018, Cue was advised by the National Offshore Petroleum Titles Administrator (NOPTA) that a 12 month Suspension of Permit Years 3, 4 and 5 work program commitments, a Year 4 work commitment variation, and a 12 month extension of the permit had been approved. The permit is now valid until 25 April 2019.
Cue continues to progress Ironbark-1 well planning and review funding options to enable the well to be drilled in 2019/2020.
Cue Interest: 20% (Cue Exploration Pty Ltd)Operator: BP Developments Australia Pty Ltd
Analysis of reprocessed seismic is continuing by the Operator.
Cue Interest: 100% (Cue Exploration Pty Ltd)
Operator: Cue Exploration Pty Ltd
Mapping and evaluation of the permit is continuing, with 2 leads analogous to the Ironbark prospect identified.
EXPLORATION - INDONESIA
Mahakam Hilir PSC; Kutei Basin
Cue Interest: 100% (Cue Mahakam Hilir Pty Ltd and Cue Kalimantan Pte Ltd)
Operator: Cue Kalimantan Pte Ltd
The Mahakam Hilir PSC contains the Naga Utara prospect and the Naga Utara-4 Appraisal well.
Cue is currently seeking partners to participate in the Mahakam Hilir PSC and Naga Utara-4 well.
During the quarter, field operations were conducted to successfully plug and abandon the Naga Selatan-2 well, drilled in 2016.
Mahato PSC; Central Sumatra Basin Cue Interest: 12.5% (Cue Mahato Pty Ltd)Operator: Texcal Mahato EP Ltd
During the quarter, Cue was advised about a number of transactions which would alter the ownership of the PSC Operator and other partners. Government approval of the Change of Control of the current Operator has now been granted.
An application for an extension to the exploration period is pending and notification on the extension is expected to be received within the current quarter.
The ownership and equity changes do not affect Cue's 12.5% and Cue is optimistic that new participants in the PSC will aggressively pursue exploration opportunities if an extension is granted.
The PB well within the southern portion of the permit is permitted and ready for drilling and is likely to be the first well drilled when exploration resumes.
Cue Energy Resources Limited Annual General Meeting will be held at 9.30am on Tuesday 30 October 2018 at the offices of BDO:
Tower 4, 727 Collins Street Melbourne Victoria 3008.
Cue Energy Resources Ltd and Cue Resources Inc. have been named as defendants, along with a number of other companies, in litigation pending in Texas, USA in relation to the Pine Mills oilfield. Cue Energy Resources Ltd and Cue Resources Inc. believe the suit has no merit and continue to abide by Court requirements in order to defend the cases if required. Motions to dismiss the lawsuit have been filed and are currently under consideration by the assigned judge in the case.
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