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Quest Petroleum Has Oil And Gas Production On Its Radar

Quest Petroleum (ASX: QPN) is moving to add Indonesian production assets to its portfolio and has reached a strategic partnership with oil and gas advisory Moyes & Co to help with the process.

Managing director Anthony Milewski told Proactive Investors that while the company was excited about its exploration strategy at the Ranau production sharing contract in South Sumatra, it also wanted to take advantage of the opportunities in securing production.

"Indonesia has gone from a net exporter to a net importer and the Government has been asking around, how do we extend production?"

He note that while there are big projects that required high levels of investment from large companies, there are also opportunities that Quest is keen to follow up on.

"There is a whole niche available through workovers, really adding value in fields which are producing, but where you can come in and boost production from a couple of thousand barrels per day to 10,000 barrels per day," Milewski said.

He added the company would also consider modestly priced production assets as well as assets with near term production potential.

"In fact, we have a list of 7 or 8 projects that are in various stages of review," Milewski noted.

Putting the pieces in place

Quest has been putting all the pieces it needs to add production in place.

Quest deputy chairman Mochamad Thamrin and his family have far reaching contacts and relationships in Indonesia and have received numerous proposals to participate in existing production assets in Sumatra and West Java.

Meanwhile, the appointment of Ken Bull as its chief operating officer, brings a deep knowledge of well workovers to the company.

This has now been further bolstered by the partnership with Moyes, which will use its deep technical skills to provide a range of services including evaluation, independent third party assessment of selected assets, technical and legal due diligence on acquisitions and assist in acquisition and production funding at the asset level.

"The appointment of Moyes and Co brings world class technical skills and an independent third party perspective that will facilitate the implementation of our expanded business plan."

Moyes' assistance in facilitating funding at the asset level is also expected to minimise dilution for the company.

"Combine these and we are positioned to build a mid tier producing company. The Government and regulators alike want increased production. Perfect storm for us and we have the right team to take advantage of the opportunity."

Ranau production sharing contract

Quest is currently preparing to spud the first well in its initial three well program at the Ranau PSC in December this year, subject to rig mobilisation and land access agreements.

The company had received approval from Indonesian upstream regulator BPMIGAS for drilling of its Kayumanis‚Äź1 well in late October.

Kayumanis-1 targets up to 59 million barrels (MMbbl) of oil or 340 billion cubic feet of gas is one of 16 leads identified in the PSC that have combined potential of up to 6 trillion cubic feet of gas and/or 300MMbbl of oil.

The lead is located on the edge of an identified structural high proximate to three significant sub-basins with clear potential for hydrocarbon generation.

Kayumanis-1 targets the Baturaja Limestone and Talang Akar Sandstone Formations, which are the most prolific oil and gas reservoirs in the South Sumatra Basin.

The drill site is on well drained, elevated land adjacent to a paved asphalt road which will facilitate the commencement of drilling and completion.

Based on the results of the Kayumanis-1 Well, two further wells are planned in the initial drilling program. Work is underway on refining the physical drill locations and further details on these will be released closer to spud date.

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