(MENAFN - ProactiveInvestors - Australia) MEO Australia (ASX: MEO) is preparing to production test its Gurame SE-1XST appraisal well off northern Sumatra.
Circulation was lost at a depth of 3,145 metres, which was interpreted to be due to natural fractures in the top of the Belumai sands, while high background gas readings were noted from thin sands within the Lower Baong shale.
"The detection of gas within the Lower Baong shale with no indications of CO2 or H2S indicates the shale as the likely hydrocarbon source for the adjacent Boang and Belumai sands," managing director Jrgen Hendrich said.
"Evidence of natural fractures in the Belumai sands will enhance the potential of this interval to be a productive reservoir. We look forward to the upcoming production test of the upper zone."
MEO is now plugging back the seven inch liner prior to production testing the Baong sands.
The company had last week raised A10 million from Singapore-based investment advisor Noonday Asset Management Asia to fund production testing of Gurame SE-1XST.
Gurame SE-1X well was selected as the lowest risk drill-ready candidate for early development.
It will be drilled to a total depth of 3,425 metres to test an estimated 0.5 trillion cubic feet gas resource with potential for 57 million barrels of oil in the Baong Sandstone and the deeper Belumai Formation primary targets.
MEO expects the target reservoirs at this location to be naturally fractured and gas bearing, a combination which should enhance the potential to achieve a commercial flow rate.
The Seruway PSC is located within the offshore portion of the North Sumatra Basin, Indonesia and contains multiple existing gas and oil discoveries as well as undrilled prospects
MEO has a 100% interest in Seruway.