Lion Energy (ASX:LIO) has commenced rig mobilisation for its Bula Karang-1 exploration well in Indonesia, following receipt of final regulatory approvals.
Well pad construction and access road works are complete. Meanwhile, major drilling and support service contracts are in place, and quality assurance checks on drilling equipment are finalised.
Drilling is expected to commence in mid-October and continue to about mid-November 2026. Initial testing is targeted for November 2026, with an extended well test planned for early 2027 subject to drilling results.
Executive Chairman Tom Soulsby says the company is ‘well positioned’ as it moves into the drilling program.
“We are pleased to have commenced mobilisation for Bula Karang-1 following completion of the site works and receipt of the key approvals,” Soulsby notes.
“Together with the recent completion of the Seram (Non-Bula) sale, Lion is well positioned as we move into this important drilling program.”
The Bula Karang-1 prospect has a 12-million-barrel P50 unrisked prospective resource with an estimated 38% probability of success.
Lion retains a 45% interest in the East Seram production sharing contract (PSC), with partner OPIC funding 88% of drilling costs up to US$5.6 million. The current estimated well cost is about US$6.7 million ($9.4 million).
Lion plans a two-phase testing strategy: Subject to positive indications during drilling, initial testing will establish fluid type and reservoir deliverability. The company will then use a workover rig already in the Bula area to complete the well and undertake an extended test, targeted for February 2027.
Since acquiring the PSC in 2018, Lion has conducted exploration, including a 664km offshore 2D survey in 2020 that delineated the shallow oil portfolio. The Bula Karang prospect emerged from this seismic data as a reefal carbonate build-up.
The well plan involves drilling a deviated well from an onshore location targeting the offshore crest of the Bula Karang structure. The location was selected for access to existing oil storage, transportation, and export infrastructure in the Bula area.
Lion Energy is an Australian oil and gas explorer focused on Indonesian opportunities, with a portfolio that also includes the Seram (Non-Bula) PSC and other assets in the region.
Write to JC Villarba at Mining.com.au
Main image: Unsplash
