Drilling Expected to Significantly Increase Production and Cash Flow in 2020 Notwithstanding Global Oil Price and Coronavirus Concerns
JAKARTA, INDONESIA and DANVILLE, CA / ACCESSWIRE / March 16, 2020 / Indonesia Energy Corporation Limited (NYSE American:INDO) (IEC), an oil and gas exploration and production company focused on Indonesia, today announced that, notwithstanding the recent drop in oil prices and global outbreak of the novel coronavirus, it remains on track to move forward with its 2020 plans to drill and complete six new production wells on its 63,000 acre Kruh Block, located on the island of Sumatra. Utilizing the proceeds from its December 2019 initial public offering, drilling operations at Kruh are expected to commence in the second quarter of 2020 concurrently with commencement of the previously announced renewal of IEC’s operator contract with the Indonesian government. IEC also expects to commence planned exploration activities at its 1,000,000-acre Citarum Block on the Java near Jakarta.
While many companies in the United States have announced the suspension of their drilling operations on their uneconomic assets, IEC’s Kruh asset, as publicly reported, had an average production cost of only US$21.34 per barrel in 2018. IEC expects the same (or possibly an even lower) production cost during 2020 as IEC increases its production from the new wells drilled.
IEC’s six new wells at Kruh will be conventional vertical wells with no fracking or horizontal drilling. As previously announced, the total completion costs to drill each of these wells remains anticipated be approximately US$1.5 million. The depth of each well will be approximately 4,500 feet.
Regarding IEC’s 1,000,000-acre exploration block (Citarum Block, located on the island of Java just 16 miles from Jakarta, the largest city in Indonesia), planned activities for 2020 will continue as previously announced. During 2020, IEC expects to commence appraisal and development operations, including seismic operations, to determine the location of the first well to be drilled. IEC expects this initial well will be parallel to one of the 4 natural gas discoveries already made on the Citarum Block. Current natural gas prices in Indonesia are approximately US$7.50 per MMBTU, while in the United States, the natural gas price is only US$1.88 per MMBTU.
Mr. Frank Ingriselli, IEC’s President commented “We are living in highly uncertain times, particularly as oil and market equity prices have dropped worldwide, but we believe IEC’s value proposition remains strong as we are well positioned to continue our previously announced production and exploration plans in 2020. While companies in the United States (including public companies comparable to IEC) are struggling with uneconomic assets at current oil and natural gas prices, we are blessed with economic assets, even at the current oil price. Moreover, while we may experience unforeseen challenges due to the COVID-19 outbreak worldwide, for now our operations remain relatively unaffected. It’s for these reasons we will continue to aggressively drill production wells that should significantly increase production and cash flow for IEC before the end of this year. Additionally, our Citarum natural gas asset, with a million acres and only 17 miles from Indonesia’s capitol, is economically advantaged with natural gas prices in Indonesia that are almost 400% higher than current natural gas prices in the United States. These factors contribute to our plans to move full steam ahead with our production and development operations with a focus to implement our announced operational plans and drive shareholder value.”
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,” “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 anticipated results of IEC’s 2020 exploration and production activities and the impact of global oil prices and the novel coronavirus outbreak 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 registration statement and related prospectus for the IEC’s initial public offering filed 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
Public Relations Contact:
Phone: +1 (212) 389-9782 x 101
SOURCE: Indonesia Energy Corporation Limited
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