New production anticipated to bring IEC to cash flow positive operations
JAKARTA, INDONESIA AND DANVILLE, CA, July 05, 2022 (GLOBE NEWSWIRE) -- Indonesia Energy Corporation Limited (NYSE American: INDO) (IEC), an oil and gas exploration and production company focused on Indonesia, today announced that the company commenced drilling operations at the second of its two back-to-back producing wells. This well is named the K-28 well. The first of these two back-to-back wells, the K-27 well was completed as a discovery well in May 2022. first well is named the K-27 well). These wells are being drilled on the company’s 63,000-acre Kruh Block located on Sumatra Island.
Drilling at K-28 commenced on Wednesday, June 22, 2022. K-28 has a target total depth of 3,400 feet, and it is expected to take approximately 45 days to complete all drilling operations.
As an update to the drilling plan timing for 2022, IEC plans to drill a third new well at Kruh Block which is anticipated to commence drilling in the in September 2022 timeframe, and likely a fourth new well sometime before the end of 2022. These wells are the continuation of IEC’s previously announced drilling campaign to complete a total of 18 new production wells in Kruh Block by the end of 2024.
If drilling is successful, in the K-28 well, is expected to average production of over 100 barrels of oil per day over the first year of production and will cost approximately $1.5 million to drill and complete. Based on the terms of IEC’s contract with the Indonesian government and an oil price of $90.00/barrel (which is approximately 20% below the most recent closing price for Brent), the well is expected to generate $2.4 million in net revenue in its first twelve months, which would be enough to recover more than the cost of drilling the well in the first year of production.
The Kruh Block is located on Sumatra Island where IEC is already producing oil from 5 existing wells.
Mr. Frank Ingriselli, IEC’s President, commented “We are excited to have commenced drilling our second of two back-to-back wells and to aggressively take advantage of the current high prices for oil and move our company towards a potential cash flow positive position this year, setting the stage for further drilling and growth for our company in 2022 and beyond. We believe Kruh Block is a world class asset that should significantly grow our cash flow as we drill additional wells and seek to maximize returns on our investments and grow shareholder value. Additionally, our company is moving forward to aggressively set the stage to develop our potential billion-barrel equivalent natural gas Citarum Block, where the previous operator drilled a few gas discoveries."
About Indonesia Energy Corporation Limited
Indonesia Energy Corporation Limited (NYSE American: INDO) is a publicly traded energy company engaged in the acquisition and development of strategic, high growth energy projects in Indonesia. IEC’s principal assets are its Kruh Block (63,000 acres) located onshore on the Island of Sumatra in Indonesia and its Citarum Block (1,000,000 acres) located onshore on the Island of Java in Indonesia. IEC is headquartered in Jakarta, Indonesia and has a representative office in Danville, California. For more information on IEC, please visit www.indo-energy.com.
Cautionary Statement Regarding Forward-Looking Statements
All statements in this press release of Indonesia Energy Corporation Limited (“IEC”) and its representatives and partners that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Acts”). In particular, when used in the preceding discussion, the words "estimates," "believes," "hopes," "expects," "intends," “on-track”, "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Acts and are subject to the safe harbor created by the Acts. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of the IEC's control, that could cause actual results (including, without limitation, the future prices for oil and the anticipated results of IEC’s drilling and production activities and the impact of such activities on IEC’s results of operations as described herein) to materially and adversely differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth in the Risk Factors section of the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2021, filed on May 2, 2022, with the Securities and Exchange Commission (SEC). Copies are of such documents are available on the SEC's website, www.sec.gov. IEC undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Frank C. Ingriselli
President, Indonesia Energy Corporation Limited