Sonoro Signal E-Newsletter

Issue 11: Sonoro has 'exciting days ahead' at Budong Budong lease

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Coring activity has begun on LG-1 Up-dip appraisal well: ‘So many key risk factors removed,’ says CEO

November 1, 2017

Any gamble in life is based on risk versus reward.

Richard Wadsworth believes Sonoro Energy’s Budong Budong lease in Indonesia represents a very rare combination of the two.

“We’ve got an opportunity in Indonesia, in Sulawesi, where we’re in a new basin. It’s been drilled through. There’s an anticlinal structure. There’s bypassed oil and gas shows. And all of those things remove a lot of the risk,” Mr. Wadsworth, Chief Executive Officer and Director of Sonoro Energy (TSX-V: SNV), told Gecko Research in an interview in recent days.

“That’s really what attracted our team, and myself, to this specific opportunity. It’s got so much upside, but we think that the risk is somewhat lower than your traditional exploration-type project,” added Mr. Wadsworth.

In a Locking Horns video with 8020Connect, Mr. Wadsworth also commented: “We’re really coming back to what was previously a success, and is known to have oil and gas . . . what we’re doing is going back in (to the LG-1 structure) to prove its productivity.”

Coring drilling operations have now begun on Sonoro’s LG-1 Up-dip well on the Budong Budong Production Sharing Contract (PSC) in the Indonesian province of West Sulawesi, where crews with Sonoro’s drilling contractor PT Advanced Services Indonesia encountered a gas kick and oil shows in the cuttings and mud to surface from a depth of 297 meters.

“It’s not every day that you get to go and drill an exploration (well)—closer to an appraisal well—that has so many key risk factors removed,” says Mr. Wadsworth. “We’re the only license on West Sulawesi at the moment, and we’ve got 1,000 square kilometers.”

The Budong Budong PAC has a potential unrisked 15.9 million barrels-of-oil equivalent (boe) potential resource, according to an independent estimate. This number is based on only the LG-1 structure, and does not represent the other 13 identified prospects—some of which are significantly larger.

Late last week, Mr. Wadsworth conducted interviews with both Gecko Research and 8020 Connect, where he discussed topics such as:

  • The paradigm shift that Sonoro is creating in Indonesia with the LG-1 appraisal well, using a smaller, more cost-effective hydraulic coring drilling rig for shallow targets;
  • Additional coring and testing information to assess the reservoir;
  • Government relations in Indonesia (“we’re getting a lot of attention from them . . . they’re very keen to see us succeed”); and
  • Next steps, assuming success with the LG-1 Up-dip well (“we have a significant opportunity to go after a number of other targets that are also present here”).

Given the paradigm shift that Sonoro is authoring with this LG-1 appraisal well—shorter timeline, reduced cost, quicker cycle to production and reserves—“we’re also looking for other opportunities where we can take this model, leverage it, and bring down costs and time for further development,” he said.

“We’ve got some exciting days ahead here.”

(DISCLAIMER: Readers are cautioned that certain statements in this article may constitute “forward-looking statements”—which, by their by their nature, are based on current expectations regarding future events that involve a number of assumptions, known and unknown risks, and uncertainties. Actual results, performance or achievements of the Company, or the industry, may vary materially from what is expressed or implied by such forward-looking statements. Therefore, readers should not place undue reliance on forward-looking statements.)

Issue 10: Starting Shallow, Thinking Big (Q&A, Part 3): Paradigm shifts, step-out wells and advanced technology

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Q&A with Sonoro CEO Richard Wadsworth (Part 3 of 3)

October 19, 2017

More than a century ago, Holland’s Doda Oil Company kicked off energy production in West Sulawesi.

Now, Sonoro Energy (TSX-V:SNV) hopes to restart that flow of oil in the so-called “Doda area”—and bring prosperity to this Indonesian province.

Drilling has begun on Sonoro Energy’s LG-1 Up-dip appraisal well in Indonesia, where the Budong Budong Production Sharing Contract (PSC) lease has a potential unrisked 15.9 million barrels-of-oil equivalent (boe) resource, according to an independent prospective resource report.

Key to Sonoro’s success in Indonesia is, naturally, finding oil and gas—but also the paradigm shift in how the company drills and tests this appraisal well and prospect.

The Sonoro Signal’s three-part Q&A with SNV Chief Executive Officer and Director Richard Wadsworth concludes with Part 3—a discussion of this paradigm shift in the approach, the challenges involved, and what this could mean for Sonoro.

 

Q: Why has it taken almost a century to get back to drilling this shallow oil?

A: The direction out there in our industry has been to typically go for the bigger, deeper, material prizes. With high oil prices and the shift in technology to bigger, deeper, higher-horsepower rigs, this was the direction companies took, including the original LG-1 well which was drilled for a deeper Eocene target with a 3,000-HP rig. Given the remoteness of Sulawesi relative to proven oil and gas basins, this was a costly venture.

Now fast forward to 2015, with oil prices dropping to $30 per barrel, and only more recently becoming stable in the $50 range. An onshore, shallow oil structure with prospective 15.9 million boe, while seen as too small by most larger companies for an international play, can have a material impact to smaller oil and gas companies that can manage such projects with lower overheads and different approaches.

For Sonoro, this is only the first structure at Budong Budong. Just in the Lariang northern portion of the block, we have more than six shallow prospects (see our most recent presentation showing other prospects). With lower prices, and the pursuit of smaller onshore shallow plays, we need to bring down our exploration-to-appraisal-to-development cycle time and costs to bring economic returns to such projects.

Now, the paradigm shift. Conventional exploration and drilling in Indonesia can be costly and take time. We are turning this upside down. We are able to to get the necessary reservoir data from better core, logs and testing all utilizing a smaller, more cost effective hydraulic drilling coring rig.

 

Q: Are these hydraulic drilling coring rigs common in Indonesia, and within the oil and gas industry?

A: Advanced Drilling Services (“ASI”) has had this rig certified by the Indonesian regulator. Such rigs have been drilling in the mining, coal bed methane and geothermal projects for some time. They just have not been adapted towards the oil and gas industry in Indonesia.

They do have their limitations, but for shallow 500-to-1,000 meter holes these rigs are in their “sweet spot.” In Canada and the U.S., it’s quite common to use these kinds of rigs in the oil and gas industry.

 

Q: You have experienced some delays in getting the ASI rig drilling to the primary target, with drilling, coring and testing. Can you comment on this?

A: As you may recall, we had to switch our drilling service provider in mid-August, and with that change we had to scramble to get the ASI drilling rig to site and set up.

Some of the original plans for our BOP (blow out preventor) system and mud system needed to be revised, due to a different rig and configuration. With these changes, we had additional logistical challenges in getting this equipment to the LG-1 site all at the same time.

The mud system we brought over had to be adapted and repaired; this alone set us back over four days since we started Oct 2. Additionally, our BOP system setup needed changing for the intermediate section of hole from 60 to 300m. This set us back a further week, due to manufacturing and getting it transported to Sulawesi.

Note that this is also one of the few exploration/appraisal wells being drilled in Indonesia at this time, so having an experienced crew familiar with these rigs is also rare. Our crew is familiar with oil and gas drilling and this kind of hydraulic coring rig, but this is the first time they are all working together on this rig and process.

While this has caused us some delays, time and cost, it doesn’t change the prospect or overall concept of what we can achieve with this approach. The well bore design and target have not changed, and we hope we’ve now worked out these few setup growing pains—and the next time around will be a much smoother, quicker process.

 

Q: Following this well, do you have other opportunities to deploy this approach?

A: First off, with a successful well here we would hope we can quickly move to drilling a couple more step-out wells on this structure as part of an early put well on production scheme or plan of development. Following that, we have a number of other structures into which we’d want to drill exploration wells within the Budong Budong PSC.

One is the Madjine structure—which, as you can see via our latest presentation on our website, is significantly larger in our view. Then there are the other structures in the Karama basin in the southern portion of Budong Budong. Beyond that, we can also look to drill smaller-core strat tests into some of the deeper targets.

Beyond Budong Budong Sulawesi, we are also reviewing a number of other shallow to medium opportunities in several basins where we believe we can be successful. We would like to have a well-balanced portfolio of appraisal and development wells, as well as some exploration opportunities.

Where exploration has advanced beyond the “big E” (i.e. lower to medium risk), with advanced seismic and geophysical works in known proven basins, we can bring our approach to reduce the timelines and costs and move those prospective resources to production and reserves in a shorter cycle.

That could have the potential to really move the needle in added value to both the government and our shareholders.

(DISCLAIMER: Readers are cautioned that certain statements in this article may constitute “forward-looking statements”—which, by their by their nature, are based on current expectations regarding future events that involve a number of assumptions, known and unknown risks, and uncertainties. Actual results, performance or achievements of the Company, or the industry, may vary materially from what is expressed or implied by such forward-looking statements. Therefore, readers should not place undue reliance on forward-looking statements.)

Issue 9: Starting Shallow, Thinking Big (Q&A Part 2): Capitalizing on a low-risk proposition in West Sulawesi

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Q&A with Sonoro CEO Richard Wadsworth (Part 2 of 3)

October 10, 2017

A history of shallow success.

Proven regional experience.

A refinery less than 48 hours away by tanker.

For all these reasons and more, Sonoro Energy expects to capitalize on a low-risk proposition.

Drilling has begun on Sonoro Energy’s LG-1 Up-dip appraisal well in Indonesia—where the Budong Budong Production Sharing Contract (PSC) lease, according to an independent prospective resource report, has just under 80 million barrels-of-oil equivalent (BOE) in-place resources.

(The photo at right, taken Oct. 6, 2017, shows the LG-1 Up-dip wellsite in the Budong Budong PSC.)

The Sonoro Signal’s three-part Q&A with SNV Chief Executive Officer and Director Richard Wadsworth continues with Part 2, a discussion of geology, oil viscosity and local engagement in the province of West Sulawesi.

 

Q: What are the biggest risks in making this drilling program a success?

A: The key risk is reservoir quality and oil quality. The oil seeps in the region, and historical information, indicate light oil with over 30 API.

Based on outcrop assessment, regional geology, LG-1 well and mudlog information, and petrophysics, we believe that updip thickening of sands occur with better quality sands. There are indications that Eocene sands may be present in the Lisu sands, having been unroofed through tectonic activity and then re-deposited in the Pliocene-age Lisu formation, providing a better reservoir sand.

We can only determine this with a new appraisal well and core. Hence, the LG-1 Up-dip appraisal well being drilled right now.

 

Q: Are any further approvals needed from the Indonesian government to drill this well?

A: We require no further approvals for this exploration period appraisal well. Assuming a successful well and economic test rates, we would anticipate submitting an application for a PoP (Put well on Production), which we hope can be done relatively quickly. We would then then follow with placing the well on production, and potentially stepping out on a couple more step-out drilling wells to reach higher production and economies of scale. Potentially, we could then turn this all into a commercial plan of development under our 30-year license (in which we are currently in year No. 11).

This can also include performing additional wells and seismic analysis on other prospective structures—and, of course, developing the current LG structure discovered.

 

Q: What has your experience been, to date, working in the province of West Sulawesi with the local people and government?

A: Everyone has been very accommodating, professional and committed to hard work in order to make this a success.

The main industries in the area of this well are palm oil plantations and fishing, neither of which bring significant technology or skilled labor.

Oil development could be highly beneficial for the local and regional communities here. The island of Sulawesi trails well behind average GDP-per-capita figures in Indonesia. People here are eager for this work, with none of the malaise historically associated with higher oil prices, and are willing to take on new training, accept new challenges and work hard.

I recently had the opportunity to witness several of our new local employees working with the drilling team on setting up the drilling rig and services on site, and I was amazed at how quickly they adapted to this new working environment and how they jumped in on every opportunity to help, while also taking on our safety culture.

 

(Watch for Part 3 of the Starting Shallow, Thinking Big Q&A series—coming soon via the Sonoro Signal)


Issue 8: Starting Shallow, Thinking Big (Q&A Part 1): Drilling begins on Sonoro's Budong Budong wellsite

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Q&A with Sonoro CEO Richard Wadsworth (Part 1 of 3)

October 4, 2017

The equipment, the technology, an experienced drilling team, and the endorsement from Indonesia’s government are all in place—and drilling has begun on Sonoro Energy’s LG-1 Up-dip appraisal well in the province of West Sulawesi.

The LG-1 Up-dip well, on Sonoro’s (TSX-V:SNV) Budong Budong Production Sharing Contract (PSC) lease, is targeting the Pliocene Lisu sands, and has a potential unrisked 15.9 million barrels-of-oil equivalent resource, according to an independent prospective resource evaluation report.

(The photo at right, taken Sept. 24, 2017, shows oil seeps in the immediate vicinity of the original LG-1 wellsite in the Budong Budong PSC.)

Beyond the LG-1 Up-dip appraisal well, additional potential reservoir structures have been identified across the block.

The Sonoro Signal caught up with SNV Chief Executive Officer and Director Richard Wadsworth on the potential for opening up a proven but untested petroleum basin.

 

Q: Now that drilling on the LG-1 Up-dip appraisal well has started, why is this well considered an appraisal well?

A: In the 1890s and early 1900s this area of West Sulawesi, referred to as the Doda area, had production from shallow oil zones. These were discovered from oil seeps and surface mapping.

In 2010, the area’s first well (LG-1) in more than a century was drilled, but for a deeper target. That target was a failure—but the shallow zones showed pressure, oil and gas shows, and even a kick of gas and condensate to surface from the shallow zones.

Along with seismic and moving updip on the structure, we believe there is a thickening of the sands, which may result in oil accumulations. Indonesia’s government has also indicated to us that they would also include this well as a “step-out well,” along with the LG-1 Up-dip well, in terms of commerciality and a plan of development which may allow us to move this to production sooner than later.

So, really, this isn’t your typical exploration well where seismic is shot, a structure is identified, and drilling is done to confirm the structure and possibility of hydrocarbons. We know the region has oil. We know there’s structure and seal. And we believe that there’s oil and gas in it, since it’s been drilled through.

What we don’t know is the reservoir quality and test rates. Thus, the need to core and appraise.

 

Q: How deep will you drill? Are there deeper targets?

A: Our plan is to drill to 500 meters. As we are moving up-dip on the structure, we could see the first sand of three around 320 meters. There are three key sands we are targeting, as mentioned in our prospective resource report—which estimates just under 80 million barrels-of-oil-equivalent (BOE) in-place resources. Should the sands thicken we may see more.

Then, there are a couple more sands about 150-250 meters deeper, where gas and condensate kicked to surface and had to be controlled when the original LG-1 well was drilled. This is not our initial target, with there being limited infrastructure on West Sulawesi to get gas to market. However, demand for gas and energy is significant on Sulawesi—and something we need to study more closely.

But for now, we’re going after the easier prize, so that we can develop production and cash flow—and then look at further options to potentially pursue this resource.

 

Q: What is the size of the prize if you’re successful in finding oil from the LG-1 Up-dip well?

A: The real prize is not just this structure, and any oil production that comes from it. Ultimately, what we’re after is opening up this basin—and proving that these sands can produce consistently and economically.

The Budong Budong PSC is just over 1,000 square kilometers. Our next couple of structures are aerially several times larger, and overall there are more than 6 structures identified just in the Lariang part of the block.

So, based on our unrisked prospective resource report of 15.9 million BOE recoverable on about 80 million barrels in place, we could see this—and possibly more—with the other prospective structures.

This starts to add up quickly and becomes an attractive block.

 

(Watch for Part 2 of the Starting Shallow, Thinking Big Q&A series—coming soon via the Sonoro Signal)


Issue 7: Equipped, mobilized and motivated: Sonoro’s set for success in West Sulawesi

 

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Spudding ready to begin on LG-1 Up-dip well in Indonesia: Q&A with Sonoro CEO Richard Wadsworth

September 19, 2017

A new drilling contractor. A more powerful coring rig. Praise from the Indonesian government for the technology in play.

The stage has been set—and Sonoro Energy is ready to revisit shallow success in Indonesia.

Spudding on Sonoro’s LG-1 Up-dip well on the Budong Budong Production Sharing Contract (PSC) lease is set to begin the week of Sept. 25, or sooner, depending on weather, road conditions and final SKKMIGAS inspection and approval.

With regional experience, a proven leadership team, a nearby refinery in Balikpapan and Indonesia making steps to boost its attractiveness for oil and gas investment, Sonoro is ready to tap into West Sulawesi’s vast untapped potential.

With spudding set to begin, the Sonoro Signal caught up with Sonoro’s CEO and Director Richard Wadsworth for a Q&A session during a very exciting time for Sonoro.

 

Q: You reviewed PT Advanced Services Indonesia's center of operations in Balikpapan. What impressed you about their operations and equipment enough to offer them the Budong Budong PSC drilling contract?

A: They were very well organized with several drilling coring rigs all certified along with a long list of support equipment. In addition, they have a machining workshop so they could cut various API threads for tubulars and a number of other fittings.

With the drilling rig now mobilized to West Sulawesi and being unloaded and moved to the Budong Budong site, we’re very pleased at the way they’ve met our expectations. Now, we’re on to setting up onsite operations for drilling the well.

Finally, and not to be overlooked, they had a strong safety culture and systems in place.

 

Q: Logistically speaking, how did things go with transportation of all the other associated drilling and support services by boat to the port of Makassar, on the island of West Sulawesi, and by road to the lease site?

A: We wanted to be ready to drill in early August. We met these targets with all the other services, except the drilling rig that was to be provided by the previous contractor.

A large portion of the other services and equipment had mobilized from Java to Makassar, and then trucked from there to our site (about 250 kilometers).

The road conditions varied and the distance was long. Our sea freight services and local trucking and crane services from Sulawesi performed exceptionally, on time, and with no incidents. We are now continuing with some of these same services to get the rig moved from the pier to the site.

 

Q: How are things looking at the lease site, in terms of preparations and establishment? Once drilling activity begins on the Budong Budong PSC lease site, will this be your logistical home base? How many contractors do you expect to be based there?

A: The lease site has been ready since early July. With a significant amount of rain over the past two months, the site has held up well, but has required ongoing maintenance and care—and is now ready to accept the drilling rig.

We have also set up most of the other equipment for the drilling operations on our existing site (LG-1 Up-dip) and logistics staging site (the original lease for the LG-1 well).

Once we are fully mobilized, we expect to have about 20 to 30 people on site at any given time from about half a dozen different contractors, plus our team personnel.

 

Q: Given the events of August, what gives you confidence that you'll achieve shallow success in West Sulawesi?

A: Nothing has changed with our interpretation of the downhole appraisal prospect. On the surface equipment. Only the drilling rig and contractor have changed.

The rig with ASI has more horsepower—it’s a fit-for-purpose, 400-hp hydraulic core rig—and is able to give us more flexibility, including drill depths. With this being a core drilling rig, the footprint is significantly smaller than a convention rotary rig; this allows us to build a smaller lease, resulting in less transportation, smaller crew requirements, and flexibility in mobilization and drilling.

While drilling with coring through the formations, we’re able to do so with a smaller hole—which results in less invasive damage, while allowing us to retrieve valuable core and reservoir for evaluation. The cored hole section will then be reamed and tested. Explosives will not be used in either the coring or testing operations, which reduces the approval timeline, the operating time and the cost.

Finally, this approach should bring down our costs, thus improving the economics for a potential future development. We have also seen a very positive interest from the government in the new methodology we are using to drill these shallow oil and gas resources. We believe it can give us a competitive and comparative advantage.


Issue 6: Matra Regent encourages West Sulawesians to ‘fully support this drilling program’

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Regional government, upstream regulator say Sonoro’s Budong Budong appraisal well initiative could bring ‘positive impact’

August 23, 2017

The regional government in Indonesia’s West Sulawesi province and the country’s upstream oil and gas regulator have begun advocating for the potential benefits of Sonoro Energy’s LG-1 Up-dip appraisal well program, according to local media reports.

According to a mid-July article in Metrosulawesi, the newspaper of record in the West Sulawesi capital of Mamuju, the Matra Regent’s office and SKK Migas are encouraging the local government and communities to “fully support this drilling program” with the potential to bring “positive impact.”

“If we have oil here, it will raise standard revenue per capita . . . to the national level,” the newspaper quotes H. Agus Ambo, the vice-regent of Matra, as telling journalists during a news conference in the Mamuju Regent’s office.

Sonoro Energy (TSX-V: SNV) is on track to begin spudding its LG-1 Up-dip well in the Budong Budong Production Sharing Contract (PSC) lease about mid-September.

Sonoro and its wholly owned subsidiary, Stockbridge Oil and Gas, are targeting near-term oil production in the Budong Budong region, where the area’s shallow-surface anticlines show an unrisked prospective recoverable equivalent of 15.9 million barrels of oil as a net-mean-case scenario.

“Our aim through this LG-1 Up-dip program is to bring prosperity to all parties—including local communities, in the form of jobs and economic spinoffs through Indonesia-based contractors,” says Sonoro’s Chief Executive Officer and Director Richard Wadsworth.

Sonoro closed a CAD$3.6-million non-brokered private placement in May 2017 for drilling activities in the Budong Budong PSC lease area.

Civil works are complete at the site, a new drilling contractor, PT Advanced Services Indonesia, has been selected and is preparing to mobilize while the other drilling services have been transported via ship to West Sulawesi and are now on site.

“The Indonesian contractors we’ve worked with have done excellent work, and now we are pleased to have another local contractor in PT Advanced Services to drill the well —as our LG-1 Up-dip well target drilling date rapidly approaches with a drilling rig that is certified and approved to drill,” says Mr. Wadsworth.


Issue 5: A recipe for Indonesian success: Go shallow, go local and repeat

Sonoro’s Budong Budong approach could be a ‘clear advantage’ for future wells

August 3, 2017

Shampoo bottle instructions: Lather. Rinse. Repeat.

Sonoro Energy’s recipe for success: Go shallow. Go local. Repeat.

With Sonoro Energy (TSX-V: SNV) firmly on track to begin spudding its LG-1 Up-dip well in the Budong Budong Production Sharing Contract (PSC) lease around mid-August, the company is looking for repeatable success—within Indonesia, and elsewhere in southeast Asia.

“We’ve taken some time to go over the positive learnings and developments, to date, of the Budong Budong appraisal well program and our collective experiences,” says Sonoro’s Chief Executive Officer and Director Richard Wadsworth.

“We believe we could parlay this process into a clear advantage in pursuing new opportunities in Indonesia.”

Key, repeatable elements of Sonoro’s Budong Budong approach include:

  • Early engagement with the local community in the province of West Sulawesi, which has meant further local involvement and employment;
  • A Jakarta-based team that’s predominantly Indonesian, with members having lived and worked in Sulawesi, which enhances interaction and trust with the local community, leaders and government;
  • Exploration and appraisal in areas where others came, left and bypassed shallower hydrocarbons while gunning for the deeper, more conventional big prize, provided that strong surface geology, geophysics, seismic and regional modelling are available to reduce risk;
  • Using a smaller fit-for-purpose rig, which has reduced mobilization costs, land use, and the complexity of manual hydraulic systems, while also providing significant drilling benefits such as increased drilling control and stability, less invasive drilling mud pressures and improved core recovery;
  • Leveraging Indonesian service providers and companies, which have consistently proven that they can support a successful program at much lower costs.

All of these practices have been accomplished without sacrificing health, safety or the environment—and all of them meeting or exceeding industry standards.

“Collectively, these practices have allowed us to execute quickly and reduce our costs significantly,” says Mr. Wadsworth. “And with lower finding and development costs, we could potentially develop a larger program in a shallow oil and gas field that normally would have been overlooked, possibly leading to the further opening of a new basin of production.

“With Indonesia now importing more than a million barrels of oil a day, and limited new exploration and developments occurring,” he notes, “this would be an economic benefit to all Indonesians.”

Sonoro’s approach has also earned the respect of officials within Indonesia’s upstream oil and gas regulator, adds Mr. Wadsworth.

“Government officials have commended our company on many of these practices,” he says, “and encouraged us to seek further opportunities in the Budong Budong PSC—and elsewhere in Indonesia.”

 

(DISCLAIMER: Readers are cautioned that certain statements in this article may constitute “forward-looking statements”—which, by their by their nature, are based on current expectations regarding future events that involve a number of assumptions, known and unknown risks, and uncertainties. Actual results, performance or achievements of the Company, or the industry, may vary materially from what is expressed or implied by such forward-looking statements. Therefore, readers should not place undue reliance on forward-looking statements.)

Issue 4: Taking aim at Budong Budong and beyond

Sonoro actively seeks existing assets in southeast Asia with a future upside

July 26, 2017

There are plenty of fish in the sea.

And for Sonoro Energy, they may be just across the Java Sea . . . or the Flores Sea . . . or the Banda Sea.

Sonoro Energy (TSX-V: SNV) is fully committed to developing its Budong Budong Production Sharing Contract (PSC) in West Sulawesi, Indonesia, where spudding on the LG-1 Up-dip site is expected to begin in early August.

At the same time, Sonoro is also actively seeking other opportunities to acquire onshore oil and gas assets in Indonesia and elsewhere in southeast Asia—from discoveries to appraisals to developments, with near-term production potential and a future upside.

“Our Sonoro Energy team has significant brownfield experience, with the ability to implement new technology,” says Sonoro Chief Executive Officer and Director Richard Wadsworth. “So we are constantly on the lookout for existing onshore oil and gas production, with upside opportunities, in Indonesia and the surrounding area.

“Essentially, we are looking to connect assets with near-term production and cash flow,” he adds, “with the appropriate capital markets to bring prosperity to all parties.”

Sonoro recently closed a CAD$3.6-million non-brokered private placement for drilling activities in the Budong Budong PSC lease area.

Sonoro is also actively looking for new onshore opportunities in the region that meet key company criteria, such as:

  • Shallower (typically less than 1,000 metres), low-risk opportunities, where Sonoro can apply its development approach andtechnology upside;
  • Oil and gas contracts that have not been developed due to previous weak commodity markets, and insufficient capital or access to capital;
  • Contracts that offer the ability to establish early production, credibility and jobs in the local community, leading to early cash flow and further production growth;
  • Contracts with further development and exploration upside; and
  • Contracts whose geographic locations offer the ability to create a core production area.

“Our team at Sonoro, and our wholly owned subsidiary, Stockbridge Oil and Gas Ltd., collectively has decades’ worth of exploration and production experience in southeast Asia,” says Mr. Wadsworth.

“That’s pivotal to our overall goal of developing a diversified portfolio of productive onshore assets in Indonesia and southeast Asia.”

 

(DISCLAIMER: Readers are cautioned that certain statements in this article may constitute “forward-looking statements”—which, by their by their nature, are based on current expectations regarding future events that involve a number of assumptions, known and unknown risks, and uncertainties. Actual results, performance or achievements of the Company, or the industry, may vary materially from what is expressed or implied by such forward-looking statements. Therefore, readers should not place undue reliance on forward-looking statements.)

Issue 3: Sonoro target named to 2017 Wells to Watch list

LG-1 Up-dip well in Indonesia earns a spot on DrillingInfo’s worldwide index of ‘regionally significant prospects’

July 20, 2017

Sonoro Energy is seeking shallow, repeatable success. Its target just got some deep respect.

Sonoro’s Budong Budong LG-1 Up-dip well, in the Indonesian province of West Sulawesi, was recently named to DrillingInfo’s 2017 Wells to Watch list.

The Budong Budong PSC region in West Sulawesi is estimated to have 16 million barrels of prospective recoverable resources.

“This is very gratifying for Sonoro Energy,” says Sonoro’s Chief Executive Officer and Director Richard Wadsworth. “We’ve targeted the Budong Budong lease because the LG-1 Up-dip site is a simple, low-risk appraisal well with shallow drilling targets, great potential and a history of success.”

The worldwide 2017 Wells to Watch list of “regionally significant prospects” was released in late June by DrilingInfo, an industry intelligence service.

“In this report, DrillingInfo experts from around the globe pinpoint 53 of the top wells and exploration drilling programmes to watch through the remainder of 2017,” reads the 2017 Wells to Watch report.

Sonoro (TSX-V: SNV) expects spudding of the the LG-1 Up-dip well to begin in early August, which comes after much planning and work at:

  • obtaining the necessary local engagement and government approvals;
  • securing PT Pontil, a subsidiary of Major Drilling Group International, as its drilling contractor;
  • obtaining its environmental permit to drill up to seven wells in the Budong Budong PSC area; and
  • organizing the transportation of the drilling rig, and all associated equipment and services, to the Budong Budong lease site in late July.

Additionally, Sonoro has identified several other large seismic structures within the Lariang Basin as next-step activities following the drilling of the LG-1 Up-dip well.

“Our aim is to leverage previous success/discoveries, our team’s track record, experience and technology,” says Mr. Wadsworth, “to build a significant and balanced portfolio, starting with near term production, of high-quality oil and gas assets in onshore Indonesia and southeast Asia.”
 

(DISCLAIMER: Readers are cautioned that certain statements in this article may constitute “forward-looking statements”—which, by their by their nature, are based on current expectations regarding future events that involve a number of assumptions, known and unknown risks, and uncertainties. Actual results, performance or achievements of the Company, or the industry, may vary materially from what is expressed or implied by such forward-looking statements. Therefore, readers should not place undue reliance on forward-looking statements.)

Issue 2: Indonesia's Budong Budong block: Drilling into a promising exploration history

Sonoro focused on previous success where others came, looked and left

June 22, 2017

Others have taken a Veni, Vidi, Verti philosophy . . . which, translated loosely from Latin, means “I came, I saw, I turned around.”

And because of it, their losses could become Sonoro Energy’s gains.

Sonoro (TSX-V: SNV) is fully committed to revisiting the shallow success of oil exploration in Indonesia’s onshore West Sulawesi province, which dates back more than a century.

With an appraisal well drilling program now in motion for its Budong Budong block, following the recent raise of CAD$3.6 million through a non-brokered private placement, Sonoro is focused on successful production in an area where others came, looked . . . and left.

“The Budong Budong region has an intriguing history in terms of oil exploration, dating back to the Doda Oil Company’s arrival back in the 1890s,” says Sonoro Energy’s chief executive officer Richard Wadsworth.

“Frankly, it’s remarkable that regular shallow-well oil production has not taken place in the region to date—and that’s why we’re focusing our efforts on fast-tracking this process.”

In recent days, those fast-tracking efforts include:

In spite of abundant seismic and well data that shows great promise—an unrisked prospective recoverable equivalent of 15.9 million barrels, as a net-mean-case scenario—Sonoro and its wholly owned subsidiary, Stockbridge Oil and Gas, are the first industry players to seriously consider drilling the area’s shallow-surface anticlines.

Among the highlights of the area’s drilling history:

  • Between 1898 and 1905, Holland’s Doda Exploration Company drilled four shallow wells in an area commonly known for its active oil seeps
  • All four of these wells yielded significant oil and gas shows, with several blowouts
  • Notes from these drilling operations remarked: “Sand pump, small drill collar and seven pipes were thrown from the drilling platform” and “For 4 hours, rocks and mud with many oil traces flew out of the borehole, with great force”
  • Through much of the 1930s, BPM (Shell) performed extensive field mapping and identified multiple surface anticlines, two of them with oil seeps (Bula Bae and Madjene)
  • With the Second World War looming, and the Japanese preparing to invade, these areas were never drilled
  • Between 1970 and 1974, Gulf drilled a pair of stratigraphic holes; one of these experienced a gas blowout near the old Doda wells, and was abandoned at a shallow depth
  • BP conducted seismic 2D information in 1974, and drilled one well, with impressive shows throughout, but soon turned its attention to South Sulawesi
  • Tately and Harvest attempted and failed in 2011 to test deeper targets—but its LG-1 well, drilled in the “Doda area,” yielded strong oil and gas shows through the top 750 metres, blew out at one point, and required 22 pounds of mud before the casing could be set

“Given the abundant available data, and the empirical evidence over several decades, we see our Budong Budong appraisal well program as a low-risk, high-return proposition,” says Wadsworth.

“We also believe that success in this region would open up new basins and new opportunities—and finally fulfil the potential that’s been apparent for more than 100 years.”


Issue 1: Going deep for shallow success in Indonesia

With Budong Budong license extended, Sonoro is gearing up for appraisal well program

February 27, 2017

The treasure has been locked away for nearly a century.

The team has decades’ worth of experience in southeast Asia.

The expectation? Revisiting success in Indonesia’s West Sulawesi province—and doing it for the long term.

In mid-January, the Indonesian government gave Stockbridge Oil and Gas, Sonoro Energy’s wholly owned subsidiary, a one-year extension on its Budong Budong drilling license through Jan. 15, 2018.

And with an unrisked prospective recoverable equivalent of 15.9 million barrels, as a net-mean-case scenario, Sonoro is excited about unlocking near-term production in the Budong Budong region—with a one- to two-well appraisal program scheduled for 2017.

“History tells us that Holland’s Doda Oil Company had incredible success in this area back in the early 1900s, after discovering a giant oil seep using primitive technology. Oil and gas continues to leak from wellheads today,” notes Sonoro Energy’s chief executive officer Richard Wadsworth.

“The seismic and LG-1 well data we’ve seen from the area is very promising,” he adds. “We’re focused on, and entirely committed to, repeating that shallow-well success of West Sulawesi through our LG-1 updip well—and fast-tracking the process to regular production.”

Sonoro Energy and Stockbridge Oil and Gas Ltd.’s management team has a wealth of exploration and production experience in southeast Asia, with companies like Shell, ARCO, P.T. Petcon, Pertamina and Total. Multiple members of the team were involved in the exploration of the Palangkaraya block, which was ultimately sold to Conoco-Phillips.

“We believe that the Budong Budong region has potential reserves, and we’re confident that this is a low-risk exploration initiative at shallow drilling targets—with potential for an untested new reservoir,” says Mr. Wadsworth.

Balikpapan’s Pertamina Refinery lies just across the Makassar Strait from Budong Budong, a 280-kilometer trip that takes less than 48 hours.

“With success on the LG-1 updip well, we believe this will open up numerous other prospects in the Budong Budong License and the basin that are well worth pursuing,” says Mr. Wadsworth.