CBM Asia Development Corp.
OTC Bulletin Board : CBMDF

CBM Asia Development Corp.

September 15, 2009 09:01 ET

CBM Asia Announces Spud of Indonesia's First Coalbed Methane Well

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 15, 2009) - CBM Asia Development Corp. ("CBM Asia" or the "Company") (TSX VENTURE:TCF)(OTCBB:CBMDF)(FRANKFURT:IY2) has been informed by the operator PT Medco Energi Internasional Tbk ("Medco"), that the first coalbed methane exploration well ("CBM-SE-02") in the Sekayu Production Sharing Contract ("Sekayu PSC") block located in the South Sumatra Basin, Indonesia, was spud on Saturday, September, 12, 2009.

CBM-SE-02 will be a vertical well and planned total depth is 2,000 feet, aimed at evaluating gas potential and reservoir properties of coal seams in the Muara Enim Formation, including the upper Palembang and lower Pangadang coal seams. Historical data from these formations along with extensive drilling in the area covered by the Sekayu PSC, indicate that the Pangadang and Palembang coal seams are well developed with prolific shallow coal reserves from 600 feet to 2750 feet. In August 2009, CBM Asia signed a binding Letter of Intent ("LOI") with Batavia Energy Inc. ("Batavia"), to acquire a 24 percent participation interest in the Sekayu PSC. Pursuant to the terms of the LOI, CBM Asia has provided Batavia's pro rata share of the funding for CBM-SE-02, the first official coalbed methane well to be drilled in Indonesia, and has committed to a minimum exploration investment of US$6.5 million on the Sekayu PSC over the next 2 years.

Location and formation depth prognosis for CBM-SE-02 was based on a 2007 Joint Study of the Sekayu block conducted by Medco, Lemigas, the Government of Indonesia's research and development center for oil and gas technology, and the University of Institute of Technology, Bandung; as well as completion logging data from Medco's existing oil well Jata-1 which penetrates the three main coal seams within the Muara Enim Formation. The Palembang B seam with an average thickness of 35 feet, and the Palembang C seam, with an average thickness of 50 feet, are in the upper group of the Muara Enim Formation and the Pangadang A seam with an average thickness of 33 feet is in the lower part of the formation. Coring and well testing of CBM-SE-02 for coal reservoir properties including gas composition, coal quality, absorption and permeability will be conducted in each of the three main coal seams at depths from 886 feet to 1714 feet.

Regionally, the South Sumatra Basin is attracting increasing interest with several coalbed methane exploration and appraisal projects currently underway. CBM Asia's Chief Executive Officer and President, Mr. Alan Charuk said, "The spud of the Sekayu PSC well marks the first official coalbed methane well to be drilled in Indonesia, one of the most promising coalbed methane exploration regions in the world today. Since May 2008, the Government of Indonesia has awarded 15 coalbed methane PSCs representing minimum exploration investments of approximately US$100 million over the next 3 years. In the South Sumatra Basin, industry participants such as Medco, Arrow Energy and state owned oil and gas company PT Pertamina, are rapidly moving to prove coalbed methane reserves in the region with plans for commercial production as early as 2011." The South Sumatra Basin, the largest coalbed methane basin in Indonesia, is estimated to contain in-place resources of approximately 183 Tcf (Society of Petroleum Engineers, 2004).


CBM Asia Development Corporation ("CBM Asia" or the "Company") is a Canadian-based unconventional gas company with significant coalbed methane ("CBM") exploration and development opportunities in Indonesia. The Company has 24% net participation interest in a Production Sharing Contract ("PSC") for CBM on a 58,349 hectare block located in the South Sumatra Basin of Indonesia where initial exploration drilling of a production test well is scheduled to commence in the second half of 2009. 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. As geotechnical lead, the Company is responsible for directing a US$5.6 million exploration and appraisal program over the next three years (to November 2011), to determine commercial feasibility of CBM production for the Kutai-West PSC and submit a Plan of Development to the Government of Indonesia. The Company has 40% net working interests in a second 56,500 hectare block also in the prolific Kutai Basin. Indonesia has one of the largest CBM reserves in the world with a potential 453 trillion cubic feet ("Tcf"), more than double the country's natural gas reserves. The South Sumatra Basin, the largest CBM basin in Indonesia, is estimated to contain in-place resources of approximately 183 Tcf; and the Kutai Basin, the third largest CBM basin in Indonesia, is estimated to contain in-place resources of approximately 80 Tcf (SPE, 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".


Alan T. Charuk, President & C.E.O

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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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