here we go gurame, page-23

Gurame P50 gas reserves are calculated to be 500bcf.

The NPV of a small scale development at Gurame according to WHTM is in the order of $226 million, that is 50cps (see below, Oil Potential).

This is the worst case scenario according to the highly conservative WHTM. Such a "small scale development" would only require a 100bcf find at Gurame. If we ignore the economies of scale of a larger development, the 500bcf (P50) of gas at Gurame would have a NPV of $1.25 billion, or more than $2/share.

Not bad hey. One would call that relatively material and hence why MEO have opted for the best near term development option.

The final point is that none of the historical wells had the luxury of being designed and sited with the benefit of modern 3D seismic, which MEO used to design the well about to spud in 10 days time.



Oil Potential

Gurame oil potential. Earlier explorers in the region discovered gas at Gurame but also found – but did not properly test – two separate oil legs at about 2724 metres and about 3012 metres respectively in the Baong and Belumai formations. Permeability is relatively low and the next well – Gurame SE-1x – will test the gas cap and also the oil production potential of natural fractures at the top of the rollover adjacent to a fault line.
We believe that the worst case scenario for Gurame is a small-scale gas field development producing around 10-15 Pj of gas annually, contracted to the Arun LNG plant or local gas and power generation customers. However we believe that even a small-scale gas development would have a significant NPV to its owners, due to LNG netback prices and the low pipeline distance (30 kms) to Arun.
Indonesia is currently running a gas deficit and thus domestic prices have trended up close to LNG netback prices (US$6-7/Gj). Assuming an oil price of US$80 per barrel and a gas price of US$6/Gj, we estimate that a small scale gas-condensate development at Gurame would have an after-tax net present value of between $180 million and $226 million (using 20% and 15% WACC respectively).
In the 1990s the former owner of the Seruway PSC – Exxon Mobil – did a large part of the engineering work and feasibility studies for a gas-condensate field development at Gurame. The project stacked up economically (despite the incredibly low gas prices and less favourable fiscal regime prevailing at the time) but was not pursued because it lacked materiality to a company of the size of Exxon Mobil.

From WilsonHTM.