CBM Asia Development Corp.
OTC Bulletin Board : CBMDF

CBM Asia Development Corp.

August 18, 2010 09:30 ET

CBM Asia Announces Rig Mobilization for Coalbed Methane Exploration Program in South Sumatra

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 18, 2010) - CBM Asia Development Corp. ("CBM Asia" or the "Company") (TSX VENTURE:TCF)(US:CBMDF)(FRANKFURT:IY2), announces that Jakarta-based PT Medco CBM Sekayu ("MedcoEnergi"), a wholly owned subsidiary of PT Medco Energi CBM Indonesia, its operating partner on the Sekayu coalbed methane production sharing contract ("PSC"), has confirmed mobilization of a drilling rig to the contract area in the South Sumatra Basin, Indonesia.

The main target for coalbed methane exploration in the Sekayu PSC block is the coal-bearing Middle Palembang Formation which is characterized by continuous and thick coal from multiple coal seams present in two main coal groups, the upper Palembang Group and the lower Pangadang Group. Three main coal seams have been identified as the most promising for coalbed methane development based on their thickness. The Palembang B Seam with gross thickness of 48 feet, Palembang C Seam with gross thickness of 114 feet and Pangadang A Seam with gross thickness of 109 feet. This information is supported by extensive well geochemical data from PT Medco Energi International's multiple oils wells located across the Sekayu PSC contract area.

Medco Energi is planning to sequentially drill three exploration wells in the Sekayu block – CBM-SE-04, CBM-SE-03, CBM-SE-01 and set intermediate casing above the Palembang coal groups. The first of these wells is expected to spud on August 18, 2010. A second rig will core the Palembang and Pangadang coal groups. These three exploration wells are estimated to expose approximately 184, 184 and 156 net feet of coal to total depths of 3350 feet, 3300 feet and 2500 feet, respectively. Depending upon initial results, further work on CBM-SE-01 would test the individual seam groups for permeability, verify gas content and begin production testing. Due to well control regulations, the wells will be drilled in sequence and coring will commence on the third well first, once it has been cased. Subsequent initial results from these operations are not expected to be available until the fourth quarter of 2010. These results will complete and verify data already gathered from CBM SE-02, the first exploration well which was drilled in September 2009, and are expected to provide the Company with a refined gas-in-place estimate over the block, gas content and permeability ranges for the same area, and gas and water production rate estimates, either for the CBM-SE-01 or CBM SE-02 location.

CBM Asia Development Corp. is a Canadian-based unconventional gas company with significant coalbed methane ("CBM") exploration and development opportunities in Indonesia. The Company has entered into a binding letter of intent to acquire a participating interest in a production sharing contract ("PSC") for CBM on a 58,349 hectare block located in the South Sumatra Basin where initial exploration drilling of a production test well commenced in the second half of 2009. The Company has committed to fund an initial US$3.25 million in exploration expenditures on the Sekayu PSC to prove reserves and submit a Plan of Development to the Government of Indonesia. Sekayu Block Interests of the Company, Ephindo and Batavia Energy are held in South Sumatra Energy, Inc. The Company also has an 18% net working interest in a PSC for CBM on a 76,000 hectare block located in the Kutai Basin of East Kalimantan. Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country's natural gas reserves (Stevens and Hadiyanto, 2004). Between May 2008 and August 2009, 15 CBM PSCs were granted by the Government of Indonesia, representing exploration commitments of US$95.68 million over the next 3 years. The Company trades on the TSX Venture Exchange under the symbol "TCF". http://www.cbmasia.ca


Alan T. Charuk, President & CEO

Gas-in-place resource estimates make no allowance for recovery of the gas. The volumes of gas which may be recoverable will depend on the reservoir characteristics encountered and future economic conditions. These gas in place estimates are not compliant with volumes of oil and gas resources classified as "discovered petroleum initially-in-place" within the meaning of the Canadian Oil & Gas Evaluation Handbook (COGE Handbook). The term "discovered petroleum initially-in-place" is equivalent to discovered resources, and is defined in the COGE Handbook to mean that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production.

This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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