2012 Recap: This truly has been an exciting year for CBM Asia:
— Material CBM Acreage Position. CBM Asia acquired material positions in
key coalbed methane (CBM) basins in Indonesia, which the Company
considers to be in the final stages of Indonesia’s CBM industry land
grab. Our gross acreage holdings increased to 2.45 million acres (1.25
mn net), up significantly from 0.69 million acres (0.31 mn net) held at
year-end 2011. The company also acquired the optionality to acquire a
further gross 4.1 million acres (2.13 mn net).
— Successful Six-Well De-risking Program. CBM Asia and its partners
drilled and tested a total of 6 CBM test wells during 2012 measuring
higher-than-expected gas content at the Kutai West PSC (Production
Sharing Contract) in East Kalimantan. We also began to dewater 2 test
production wells at the Sekayu PSC in South Sumatra, with steadily
increasing and encouraging rates of gas desorption.
— Partnership with ExxonMobil. CBM Asia signed a Joint-Venture Agreement
to farm into ExxonMobil’s Barito Basin CBM blocks as well as potential
PSCs and Joint Studies in the Kutai Basin. We are currently reviewing
Joint Operating Agreements (JOAs) and other instruments governing the
individual PSCs. Subject to government approval, we expect to play a
leading role in drilling operations during 2013. This partnership has
the potential to transform the Company.
— Larger 15 Tcf Gas Resource Target. Based on the successful acreage
acquisition and well testing, CBM Asia now targets the goal of proving
up 15 Tcf of net recoverable gas (2.5 billion barrels of oil equivalent)
from its existing acreage positions, up from our previous target of 10
to 15 Tcf. We continue to seek very low exploration costs in the range
of USD0.01/Mcf, far below the current range of natural gas sales prices
in Indonesia (USD6.00 up to USD15.00/Mcf).
— Institutional Shareholder Base. CBM Asia shareholders register now
includes, for the first time, large financial institutions from Hong
Kong, New York, London and Toronto providing long-term support and
— Indonesia Operations Office. CBM Asia’s Indonesian operations office in
Jakarta opened in April 2012. In-country staff now totals 16, including
12 operational (geologists and engineers) and 4 administrative. Keith
Potter, General Manager and President Director (CEO) of the Company’s
Indonesian operations, has extensive CBM experience (Australia and
Indonesia) and has worked in Indonesia for 12 years. As exploration and
operations management have shifted to Indonesia the Vancouver office has
been downsized to two employees to handle only headquarter
On the other hand, a significant disappointment for the Company during 2012 has been the delay in drilling and commercializing the planned 5-well production pilot at the Sekayu PSC by operator PT Medco Energi. In addition, we note that financial markets continued to weigh heavily on the junior resource sector as a whole. Nevertheless, the coalbed methane industry in Indonesia continues to make good progress overall as other operators (BP, Dart Energy, ENI, Santos, TOTAL and others) update their programs.
2013 Work Program.
CBM Asia will announce its 2013 work program during the week of January 8, 2013 once final project work programs have been reviewed.
ABOUT CBM ASIA DEVELOPMENT CORP.
CBM Asia Development Corp. is a Canadian-based unconventional gas company with significant coalbed methane (“CBM”) exploration and development opportunities in Indonesia. The Company holds various participating interests in five production sharing contracts (each a “PSC”) for CBM in Indonesia. Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country’s natural gas reserves (Stevens and Hadiyanto, 2004). Since 2008 a total of 54 CBM PSCs have been granted by the Government of Indonesia, representing exploration commitments of well over US$100 million during the next 3 years. In addition to CBM Asia, other companies active in CBM exploration in Indonesia include BP, Dart Energy, ENI, ExxonMobil, Medco, Santos, and TOTAL. BP, ENI, and the Indonesian government have confirmed that commercial CBM production started in March 2011 from the Sanga-Sanga PSC and is being exported from the Bontang LNG facility. The Company trades on the TSX Venture Exchange under the symbol “TCF”.cbmasia.ca
ON BEHALF OF CBM ASIA DEVELOPMENT CORP.
Alan T. Charuk, President & CEO
The gas in place estimates referred to herein have not be classified as “discovered petroleum initially-in-place” within the meaning of the Canadian Oil & Gas Evaluation Handbook (COGE Handbook). The term “discovered petroleum initially-in-place” is equivalent to discovered resources, and is defined in the COGE Handbook to mean that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. There are no assurances that any portion of the estimated gas in place resources will be discovered. Furthermore, the above estimates make no allowance for the recovery of the gas which will depend on, among other things, the reservoir characteristics encountered and future economic conditions.
This news release contains forward-looking statements, which relate to future events or future performance and reflect management’s current expectations and assumptions. Such forward-looking statements reflect management’s current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. Specifically, the proposed farm-in arrangement with ExxonMobil referred to herein is subject to, inter alia, the negotiation and execution of formal agreements, governmental and third party approvals, satisfactory due diligence and available financing. There are no assurances that the Company will be successful in entering into formal agreements with ExxonMobil on commercially acceptable terms or at all. All of the forward-looking statements made in this news release are qualified by these cautionary statements and those made in our Canadian continuous disclosure filings available on SEDAR at sedar.com including our December 31, 2011 year end annual MD&A dated April 26, 2012 and second quarter 2012 interim MD&A dated August 28, 2012. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required under applicable securities legislation. This news release does not constitute an offer to sell securities and the Company is not soliciting an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CBM Asia Development Corp.
(604) 684-2340 or (866) 504-4755
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