The well is currently preparing to set 9 5/8” casing at approximately 78m prior to drilling ahead in 8 ½” hole. AMT-1 is expected to  take no more 10 days to drill to total depth of approximately 570m KB and  evaluate the section. A further 10 days is estimated for the likely test program. Lion has a 40.7% interest in the well and will keep the market informed on material events through the drilling and testing program.

The well-defined Amanah Timur prospect being tested by the well is situated  within a highly-productive hydrocarbon trend and is covered by recently acquired seismic data. The well targets Keutapang sandstone reservoirs which have delivered over 600mmbbl oil, 2.2tcf gas and 50mmbbl condensate in near proximity. Gross recoverable Prospective Resources1 are estimated to be 2.0-4.8-10.7mmboe (P90-P50-P10).

The well has an estimated cost of US$1.3mil (US$0.53mil net to Lion). This well cost includes provision for up to three production tests. Multiple sandstone reservoirs are being targeted including a shallow objective which had oil production in pre 1930 wells that are in close proximity.

Lion’s CEO, Kim Morrison, noted “The drilling of Amanah Timur represents a key milestone for Lion. We have led the technical effort on this prospect which represents a highly attractive opportunity with near term cash flow potential.”

South Block A PSC

Lion has a 40.7% interest in the South Block A PSC with the other participant being Renco Elang Energy Pte Ltd (59.3% interest and Operator).

The South Block A PSC is centrally located in the North Sumatra Basin and it is divided into two separate blocks; the western block is known as Area 1 and covers an area of 1,165km2 while the smaller Area 2 block to the east, extends over the coastal boundary with an offshore portion and covers an area of 414km2 .The North Sumatra Basin is one of the most prolific hydrocarbon provinces in Western Indonesia with over 80 known oil and gas fields. The United States Geological Survey World Petroleum Report (2000) indicates that reserves of approximately 25.6tcf of gas, 900mmbbl of natural gas liquids and 700mmbbl of oil have been found in the North Sumatra Basin.

South Block A PSC is an underexplored block with a suite of attractive prospects emerging from the 2014 seismic survey shot by the joint venture. The Amanah Timur prospect was chosen to be tested as our first well due to its well-defined structure and high probability of success. Good follow up potential exists in the block.

The region has an attractive gas market with solid demand, consequent high prices and a new open access pipeline to Medan extends through the PSC acreage.

Exploration Drilling

AMT-1, with a planned total depth of approximately 570m KB, is testing a well-defined anticline which has existing shallow oil reservoirs that produced approximately 200,000 barrels of oil in a period prior to WWII. The well will test this oil productive sequence as well as deeper reservoir within the objective late Miocene Keutapang section. Importantly, it has near-term commercialisation potential with good infrastructure in close proximity.

Gross anticipated well cost for the approximately 570m total depth well is projected to be US$1.3mil (Lion share ~US$0.53mil). This cost includes site preparation and running of up to three production tests.