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Operating costs were estimated at US$2.75 million2 or $34/bbl, which is a 25% reduction from January 2024 when Criterium acquired the assets. Lower costs are due to implementation of cost control measures and a full quarter of natural gas partially offsetting diesel consumption used for power generation.
The Company expects full third quarter financials and MD&A will be released in late November.
Drilling Update
During the third quarter, the Company initiated its 2024 infill drilling campaign on the Tungkal PSC, focused on untapped areas in the MGH field, targeting multiple pay zones within the Talang Akar Formation (the "TAF"). The fluvial deltaic reservoir within the TAF features on average 20 to 25 metres of net pay, with 10 to 20% porosity and 50 to 100 millidarcies of permeability, reservoir characteristics that are typically associated with higher productivity.
MGH-43, the first of two planned infill wells, spud on September 14th and reached its target of 1,238 metres Measured Depth ("MD") on September 29, 2024. The well intersected multiple reservoir zones in the TAF with good to excellent oil shows. Logging completed on MGH-43 identifies prospective producing intervals in the CT, CH, EL, EH, F, and GH intervals. These total an estimated 41m of prospective gross sand interval3 that will be perforated upon completion of the well. The Company also identified approximately 13m of Net Pay3 potential gas bearing sands in the Gumai formation (~500 - 580m MD). The Gumai zone is present throughout the MGH field and has indications of hydrocarbons but has not been tested. The Company is currently evaluating how this discovery could complement the SE MGH gas development.
Due to unstable hole conditions in MGH-43, the Company was unable to conduct pressure testing and resistivity calculations on the zones of interest and therefore is unable to determine estimated productivity rates prior to the well being put on production. In addition, seven-inch production casing was unable to be set below 1098m MD, and as a result the Company is unable to fully test or produce the lower CL zones which had demonstrated good oil shows during drilling.
Due to the lack of pressure data and ongoing completion of MGH-43, the Company has decided to defer drilling the 2nd planned infill well until such time as the production data has been collected from MGH-43. MGH-43 is currently being completed and tested prior to being put on production, which is anticipated towards the end of October.
Additional information on the preliminary results of MGH-43 is available in the corporate presentation, which can be found on the Company's website.
Bulu Transaction Update
On September 5th 2024, Criterium received a second US$500,000 non-refundable payment from the buyer of its wholly owned subsidiary which owns a 42.5% non-operated working interest in the Bulu Production Sharing Contract, as originally announced on May 21, 2024. Inclusive of this US$500,000 payment, to date Criterium has received US$1,000,000 of the US$7,750,000 total purchase price consideration for the transaction.
Criterium firmly believes closing the transaction represents the optimal approach to value creation for shareholders in the near-term. Criterium anticipates closing of the Transaction to occur in Q4 2024, which remains contingent upon the buyer's ability to secure the necessary financing.
Presenting at Schachter Catch the Energy Conference
Criterium will be presenting at the Schachter Catch the Energy Conference in Calgary, Alberta on Saturday, October 19th at 2:40 p.m. MT. Investors interested in attending the conference can obtain more information here.
Stay Connected to Criterium
Shareholders and other interested parties who would like to learn more about the Criterium opportunity are encouraged to visit the Company's website and review a recent corporate presentation, and to follow the Company on X (formerly Twitter) at https://x.com/CriteriumEnergy and on LinkedIn at https://www.linkedin.com/company/criterium-energy/ for ongoing corporate updates and relevant international oil and gas industry information.
About Criterium Energy Ltd.
Criterium Energy Ltd. (TSXV: CEQ) is Canadian-based upstream energy company focused on the consolidation and sustainable development of assets in Southeast Asia that can deliver scalable growth and cash flow generation. This region is expected to house a population approaching 800 million people within the next 25 years, driving world-leading economic growth and record energy demand. With international operating expertise and a local presence, Criterium intends to contribute responsible, safe and secure sources of energy to help meet this demand. The Company is committed to maximizing total shareholder return by executing across three strategic pillars that include (1) fostering a successful and sustainable reputation; (2) leveraging innovation and technology arbitrage; and (3) achieving operational excellence with an unwavering commitment to safety. For further information please visit our website (www.criteriumenergy.com) or contact:
Matthew Klukas
President and Chief Executive Officer
Criterium Energy Ltd.
Email: info@criteriumenergy.com
Phone: +1-403-668-1630
Andrew Spitzer
Chief Financial Officer
Criterium Energy Ltd.
Email: info@criteriumenergy.com
Phone: +1-403-668-1630
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES.
Notes
1 Field estimate, based on most recent production data
2 Management estimate, based on monthly operations data
3 Management estimate, based on mud log data, well site geological observations, and wireline logging information
Abbreviations
bbls barrels of oil
bbls/d barrels of oil per day
MGH Mengoepeh
PLT Pematang Lantih
TAF Talang Akar Formation
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking information and statements that are based on expectations, estimates, projections, and interpretations as at the date of this news release. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends", "seek", "aims" and similar expressions are intended to identify forward-looking information or statements.
Factors that could cause actual results to vary from forward-looking statements or may affect the operations, performance, development and results of Criterium's businesses include, among other things: risks and assumptions associated with operations; risks inherent in Criterium's future operations; increases in maintenance, operating or financing costs; the availability and price of labour, equipment and materials; competitive factors, including competition from third parties in the areas in which Criterium intends to operate, pricing pressures and supply and demand in the oil and gas industry; fluctuations in currency and interest rates; inflation; risks of war, hostilities, civil insurrection, pandemics, instability and political and economic conditions in or affecting Indonesia or other countries in which Criterium intends to operate (including the ongoing Russian-Ukrainian conflict); severe weather conditions and risks related to climate change; terrorist threats; risks associated with technology; changes in laws and regulations, including environmental, regulatory and taxation laws, and the interpretation of such changes to Criterium future business; availability of adequate levels of insurance; difficulty in obtaining necessary regulatory approvals and the maintenance of such approvals; general economic and business conditions and markets; and such other similar risks and uncertainties. The impact of any one assumption, risk, uncertainty or other factor on a forward-looking statement cannot be determined with certainty, as these are interdependent and the Company's future course of action depends on the assessment of all information available at the relevant time. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
With respect to forward-looking statements contained in this press release, Criterium has made assumptions regarding, among other things: the COVID-19 pandemic and the duration and impact thereof; future exchange and interest rates; supply of and demand for commodities; inflation; the availability of capital on satisfactory terms; the availability and price of labour and materials; the impact of increasing competition; conditions in general economic and financial markets; access to capital; the receipt and timing of regulatory and other required approvals; the ability of Criterium to implement its business strategies; the continuance of existing and proposed tax regimes; and effects of regulation by governmental agencies.
The forward-looking statements contained in this press release are made as of the date hereof and the parties do not undertake any obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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