- Sonoro Energy (TSXV:SNV) is still negotiating a work program for the Selat Panjang oil and gas project in Indonesia
- Indonesia’s COVID-19 mitigation efforts have delayed the work program’s details, with no deadline for the program’s completion announced
- Once an agreed program is reached, workers can start reactivating and deepening previous wells, and potentially drilling new targets
- The Selat Panjang project sits within an oil basin that accounts for 45 per cent of Indonesia’s oil production
- Sonoro Energy (SNV) is holding steady, with shares trading for C$0.05 and market cap of $4.5 million
Sonoro Energy (TSXV:SNV) is still negotiating a work program for the Selat Panjang oil and gas project, amid COVID-19 concerns.
The company owns a 25 per cent interest in the project, and may purchase another 24 per cent later.
The production-sharing agreement for the project stipulates the submission of a work program to Indonesian-owned SKK MIGAS to develop the site. However, the country’s current COVID-19 lockdown laws have complicated this process.
The production agreement surrounding the project has a 20-year term, with C$103 million set aside in the first five years. The site surrounds an oil basin that provides around 45 per cent of the country’s oil production.
There is currently no deadline for submission of the work program. However, the company assured its shareholders that talks were moving forward.
The shared agreement only stipulates that the company spent $174,000 in the first year, mainly on evaluation studies. As a result, Sonoro is not concerned about meeting this spending target and maintaining its ongoing agreement with SKK MIGAS.
Despite COVID-related slowdowns, Sonoro believes that it and its partnering company will implement an operations program as soon as possible.
Once an agreed program is reached, work can begin on reactivating and deepening previous wells. Workers may also potentially start drilling new prospective targets.
The proposed work program involves re-opening a number of wells on the property. As such, the company stated that it will consider the feasibility of the wells, given the recent oil-price crash.
Sonoro Energy (SNV) is holding steady, with shares trading for $0.05 at 10:56am EST.