Serica announces Kambuna gas sales agreement

The terms of a sale of gas from the Kambuna field offshore North Sumatra, Indonesia, have been agreed, field operator Serica Energy Plc says.

Offshore staff

LONDON -- The terms of a sale of gas from the Kambuna field offshore North Sumatra, Indonesia, have been agreed, field operator Serica Energy Plc says.

The majority of the gas from the Kambuna will be sold to the Indonesian state electricity company, Perusahan Listrik Negara (PLN), at an initial price of $4.50 per million Btu escalating at 3% per annum. The gas will be delivered to Pangkalan Brandan and will be transported to PLN's Belawan power station near the city of Medan in North Sumatra, via the existing gas transmission network. The remainder of the gas will be sold at an equal or higher price to an industrial customer through an auction process, with bids due in early February.

Kambuna gas has a high calorie value, and the company expects an initial realization of over $5/Mcf. In addition to the gas, Serica initially will market 4,000-5,000 b/d of condensate at a price close to that of crude oil.

Kambuna field is under development. A production platform will be installed later this month and three development wells are scheduled to be drilled and completed.

1/16/2008

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