Mirach Energy and Pertamina sign Joint Operation Agreement for Kampung Minyak Oil Field in Sumatra

July 11, 2011 - PRLog -- Singapore Exchange mainboard-listed Mirach Energy Limited (C68.SI) (“Mirach” or “the Company”), an oil and gas company engaged in the exploration, development and production of assets in Indonesia and Cambodia, today signed a Joint Operation Agreement (Kontrak Kerjasama Operasi or “KSO”) with PT Pertamina EP, Indonesia’s state-owned oil and gas company, for the Kampung Minyak Field in South Sumatra. The KSO grants Mirach the rights to conduct development and production activities for the next 15 years.

Under the terms of the KSO, Mirach is also awarded operatorship of Kampung Minyak Field, an area covering about 45 square kilometres. Based on data provided by Pertamina, Kampung Minyak is a mature field and still contains about 65 million barrels of remaining Original Oil in Place (OOIP), located mainly in the reservoir formation between depths of 200 and 500 metres. The current production rate is 80 barrels of oil per day (BOPD). Historically, Kampung Minyak Field has been among the most prolific oil fields first discovered in the South Sumatra Basin as early as 1870. Nearby are the Limau oilfield located at about 10km northeast of Kampung Minyak, and the Talang Akar oilfield north of Kampung Minyak, both of which are still producing at healthy rates.

“We are very excited about the significant production potential of existing and proven areas through enhanced oil recovery (EOR) and by accessing deeper formations and the step out area in Kampung Minyak Field,” said Chairman and CEO Mr. William Chan. “We have assembled a good team to rejuvenate the field and to increase production rates. We are highly optimistic about this latest acquisition.”

Target Production of 1,000 BOPD by the end of Year 3

With the signing of the KSO, Mirach has formally appointed Daqing Enterprise International (大庆石油国际工程公司 or “DQE”) to provide integrated oil field production and engineering services at Kampung Minyak Field. DQE will implement the EOR programme designed to raise production, including EOR water flooding and injections techniques.

Mirach and DQE target to achieve the estimated production rates of 400, 700 and 1,000 BOPD by the end of the first, second, and third year respectively. DQE, a subsidiary of Petro China Daqing Oilfield Company Limited (中国石油大庆油田有限责任公司), is contracted to provide the required technical services in engineering, well constructions, and field operations for the Kampung Minyak oil field.

“DQE has immense experience and expertise in oilfield production, having achieved wide success in executing EOR programmes in China and in other geographical areas. We believe DQE and Mirach teams will collaborate very well together to achieve our target production rates for Kampung Minyak,” commented Mr. William Chan.

The Company plans to fund the operations of Kampung Minyak Field using proceeds from the bonds issue completed on 27 April 2011. In addition to Kampung Minyak Field, the Company’s interests in Indonesia are the Kamundan Block and Wiriagar Oil Field, both located in Papua, East Indonesia.

Notes to Editor:
The Indonesian government is currently trying to boost the country's oil and gas production. BP Migas, Indonesia’s upstream oil and gas regulator, has been encouraging operators to revitalize mature oil fields through the implementation of enhanced oil recovery (EOR) technology. In 2010, Indonesia failed to reach its oil production target of 965,000 bpd, producing only 954,000 bpd. This year's target of 970,000 bpd is also unlikely to be met. At the recent 35th Indonesian Petroleum Association Convention and Exhibition 2011 held on 18-20 May in Jakarta, Vice President Dr Boediono noted that at least 1.2 million barrels of oil per day was required to meet national demand.

About Mirach Energy
Mirach Energy (C68.SI) provides upstream oil companies with specialized IT and oilfield services and is an emerging exploration and production (E&P) company. In October 2010, the Company entered into a coal business venture. The Company’s renewed focus in the E&P businesses and strategic partnerships in Cambodia and Indonesia signals the start of an exciting phase for the future.

About DQE
As a subsidiary of Petro China Daqing Oilfield Company Limited (中国石油大庆油田有限责任公司) or Petro China Daqing, the largest comprehensive onshore petroleum technology service enterprise in China, DQE has been engaged in petroleum technical service, exploration and development of oil & gas field as well as the import and export of petroleum equipment and petrochemical products, and it is authorized by Petro China Daqing to sign the contracts with overseas employers. It has passed ISO 9000, ISO 14000series and OHSE authentications.

Issued by Racepoint Group on behalf of Mirach Energy Limited

For further info, please contact:

Mirach Energy Limited
Maggie Low +65-6536 8033 maggielow@mirachenergy.com

Racepoint Group (tel: 65-6222 2937)
Chin-Lee Tan +65-9767 9359 ctan@racepointgroup.com
Beng-Ai Yap +65-9767 9598 byap@racepointgroup.com

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