Sound Oil hit by Indonesian drilling abandonment

Shares in Sound Oil (SOU) dropped as it updated investors on difficulties leading to the abandonment of its Cataka-1 exploration well in Indonesia.

The firm said that drilling the upper section has continued to be difficult due to the unstable nature of the rock formations.

"Attempts to drill ahead from the 13 3/8-inch casing were not successful, necessitating a second side-track of the well which was established by milling a window in the casing. Similar difficulties to the first side-track have been encountered in this new section," Sound said in a note.

The operator recommended that the joint venture partners abandon the well at the present depth of 1,413 feet. It will undertake a detailed post-drilling evaluation of the operation with a view to returning to the prospect within, or at the end of, the current drilling campaign.

Sound Oil's chairman and chief executive, Gerry Orbell, said he was disappointed with the outcome.

"The well was a wildcat located in an unknown geological terrain and we are sure that the experienced operator did everything to try to get through the unstable formation. Following the evaluation the partnership will consider returning to the Cataka site," he commented.

The rig will now be demobilised and moved to the Jatayu-1 location, approximately 20 kilometres to the southeast. The Jatayu exploration well will target prospective resources of 290 billion standard cubic feet (P50).

There was also news on the Kerendan drilling campaign, where the rig is expected to be mobilised from Batam Island, Riau to Kalimantan by the end of this month. It will then commence operations by drilling four development wells on the Kerendan gas field and then begin the exploration programme on the licence.

Sound said the rig is scheduled to drill five to six wells which will allow the Kerendan Gas Field to be put onstream and explore the very large prospect at depth below Kerendan.

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