Zenith inks Indonesia field deal

Zenith Energy has signed an agreement to potentially purchase an oil production asset in Indonesia, the company announced Wednesday.

The deal would give Zenith a 100% working interest in two onshore blocks covering 65 square kilometres. The assets are currently producing more than 1,000 bopd, which is carried by pipeline to the national oil sales system. The production cost is reported to be USD 18 per barrel. 

Only one of two oilfields is currently in production. The other is expected to come on line after new well and workover drilling, doubling production by 2020. The average total depth of wells on the asset is 350-750 metres. 

“Like our existing asset in Azerbaijan, the proposed acquisition has very strong growth potential and generates profit from its sizeable existing low-cost oil production. In addition, the geology is less challenging, and the average well depth is much reduced compared to what we have in other assets, meaning that our operational expenditure for workovers and drilling new wells will be significantly smaller,” Andrea Cattaneo, the CEO of Zenith, said in a statement.

The company will decide whether to complete the acquisition by the end of April after completing its due diligence.