Introduction

Tangai-Sukananti is a KSO (an abbreviation of the Indonesian term ‘kerja sama operasi’ meaning an operation cooperation contract) project, of which Bass has a 55% share.

The Company's acquisition of the Tangai-Sukananti KSO transforms Bass Oil into a profitable oil producer in a prolific oil and gas region. Current production capacity stands at over 700 bopd.

Bass experienced Indonesian on-site personnel and Jakarta-based management team operate the Tangai-Sukananti KSO production assets containing the producing Bunian and Tangai oil fields. It was pleasing to see our success from mid-2018 in optimising production within the KSO. This lifted total production capacity and increased output from selected wells. 

The KSO is considered long-life with production expected beyond license expiry in mid-2025. The assets provide a future platform for growth through low-cost field development opportunities and execution of value-accretive acquisitions requiring minimal additional corporate overheads, given Bass’ established Jakarta-based personnel.

. Since acquiring the Tangai-Sukananti KSO, Bass has sustained strong and consistent levels of production at the operations. The result of the 2018 de-bottlenecking operations at Bunian-3ST2 boosted production from ~300 to more than 700 barrels of oil per day, consistently, for the 4th quarter of the year.

Production

Total production for the year ending 31 December 2018 was 115,559 barrels on a 55% basis (or 57,000 barrels on a net entitlement basis). Bass expects a production up-lift during 2019, due to the drilling of the Bunian 5 development well and the continued focus on implementation of field optimisation activities.

Reserve

Reserves The 2P Field Reserves in the Tangai-Sukananti KSO are assessed as at 31 December, 2018, to be 2.019 million barrels of oil. This reflects the reserves for the Bunian and Tangai oilfields . In accordance with ASX reporting requirements for fiscal environments that use production sharing contracts or similar, Bass reported Net Entitlement 2P Reserves of 0.602 million barrels. Net Entitlement Reserves are the share of cost oil and profit oil that Bass is entitled to receive under the KSO signed with PT Pertamina. The Net Entitlement Reserves formula varies with the fiscal environment, cost recovery status and oil price.

Upcoming field work

Bass said its Indonesian team is currently sourcing a well service rig to perform work including the Bunian-1 pump repair, a workover on the Bunian-4 well and the Tangai-4 conversion to water injector.

It is expecting this work to commence “as soon as possible”.

Bass is also seeking approval from its state-owned partner PT Pertamina to issue a tender for a rig to begin drilling the Bunian-5 well, which is expects will double production from the field.

If this is the case, this doubled production would take up the remaining available capacity of the Tangai-Sukananti facilities, as well as increase developed reserves.

In February, the company had reported a 113% upgrade in 1P (proven) reserves at the field from 930,000bbl to 1.78MMbbl, boosting Bass’ net entitlement reserves by 76% to 505,000bbl.

Operator

Mega Adhyaksa Pratama Sukananto(Indonesia): 45% interest.

BASS OIL LIMITED(Australia): Operator with 55% interest.