Australia-based oil and gas exploration and production company Cue Energy Resources has announced a rig contract for drilling of Naga Utara -2 well in the Mahakam Hilir production sharing contract (PSC) in Indonesia.

The Mahakam Hilir PSC is located onshore in the Kutei Basin, Kalimantan.

The company said the operator of the PSC, SPC Mahakam Hilir, has secured a drilling rig to spud the Naga Utara gas discovery in Indonesia.

Site preparation is currently in progress, and it is expected that the Naga Utara -2 well will be drilled by the end of September.

The rig will be mobilized from South Sumatra (Jambi) in the middle of July to the well site in Samarinda, East Kalimantan.

The Naga Utara -1 discovery well was drilled in 2012 to a total depth of 5,066ft measuring depth.

During drilling, the well intersected gas in two reservoir sands and flowed gas to surface continuously for seven days.

Cue Energy holds a 40% interest in the PSC, while SPC Mahakam Hilir owns the remaining 60% interest.