CBM Asia Development Corp.
TSX VENTURE : TCF
FRANKFURT : IY2

CBM Asia Development Corp.

November 26, 2008 16:39 ET

CBM Asia Awarded Production Sharing Contract by Government of Indonesia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 26, 2008) - CBM Asia Development Corp. (the "Company") (TSX VENTURE:TCF)(FRANKFURT:IY2) is pleased to announce that the Government of Indonesia has awarded a production sharing contract ("PSC") for the development and production of coalbed methane on a portion of the Company's Kutai Block located in eastern Kalimantan Island of Indonesia. The Government of Indonesia requires all companies engaged in the drilling for or extraction of coalbed methane to sign a production sharing contract.

The PSC covers an area of approximately 760 square kilometres in the Kutai basin of Indonesia and has been granted to Kutai West CBM Inc. ("Kutai West"), a consortium established by the Company and its joint venture partners, and Newton Energy Capital Inc. ("Newton"). Under the terms of the PSC, Kutai West and Newton have agreed to incur exploration expenditures totalling US$5,606,000 over a period of three years including the drilling of two core holes and four exploration wells on the Kutai Block and pay a US$1,000,000 signing bonus to the Indonesian government.

The awarding of the PSC to Kutai West is a major milestone in the Company's business plan to become a producer of coalbed methane and represents only the fourth time in its history that the Government of Indonesia has awarded PSCs for the development of coalbed methane in the country. The Government of Indonesia estimates that there are approximately 453 trillion cubic feet of coalbed methane resources in Indonesia (ADB Study, Stevens et al, 2004).

President Al Charuk comments: "Our newly signed production sharing contract is incredibly exciting for our company and all our investors. We have been working towards this for two years, and we are ready to hit the ground running in the next phase of development on our Kutai Block properties. Considering the opportunities that exist in alternative energies, we feel that our Company and our shareholders are well positioned."

The Company is currently defining evaluation well locations within certain "sweet spots" previously identified by the Company with a view to drilling its first exploration well on the Kutai Block early in 2009.

Under the terms of its existing Participation Agreement on the Kutai Block, the Company has the right to earn an 18% (net) interest in the newly awarded PSC by funding certain cash payments and exploration work as more particularly described in the Company's filing statement dated July 28, 2008. The Company retains the right to earn up to a 40% interest in the remaining 565 square kilometres of its original Kutai Block, which is not included in this PSC.

ON BEHALF OF CBM ASIA DEVELOPMENT CORP.

Alan T. Charuk, President & CEO

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.

Contact Information

  • CBM Asia Development Corp.
    Alan T. Charuk
    1-866-504-4755
    Website: www.cbmasia.ca