Indonesia Energy Announces Five-Year Extension of its Government Contract for Kruh Block

Company’s Profit Share Increases by More Than 100%

Proved Reserves Also Anticipated to Increase Given Extended Contract Term

Company Also Provides Update on Development Plans for 2023 and 2024

JAKARTA, INDONESIA AND DANVILLE, CA, Sept. 07, 2023 (GLOBE NEWSWIRE) -- Indonesia Energy Corporation (NYSE American: INDO) ("IEC"), an oil and gas exploration and production company focused on Indonesia, today announced that its joint operation contract with Pertamina, the Indonesian state-owned oil and gas company, covering the Kruh Block has been amended to extend the contract term by 5 years from May 2030 to September 2035. Kruh Block covers approximately 63,000 acres and is located onshore on the Island of South Sumatra in Indonesia.

The amended joint operation contract has the following key terms:

• The amended contract increases IEC’s after-tax profit split from the current 15% to 35%, for an increase of more than 100%.
  
• In addition, given the 5-year extended term of the contract, the amended contract is expected to increase IEC’s proved reserves at Kruh Block by over 40%.

• Furthermore, given the increased profit split, IEC’s anticipated net cash flow calculations based on its Kruh Block development plan are expected to increase by over 200% versus IEC’s anticipations under the prior contract.
  

IEC also provided an update on its Kruh Block development plan. As previously announced, in order to maximize the production at Kruh Block, IEC is in the process of conducting a workover of the existing Kruh-21 well which was drilled in 2015. Regarding the Kruh-28 well, as previously announced, IEC unexpectedly found evidence of a potential natural gas bearing reservoir between the 976 and 1,006 feet interval with 30 feet net thickness. This initial evidence was supported by both wireline logging and geologic logging data, and subsequent gas flaring. At present, IEC is in the process of sourcing a suitable rig for the workover of K-21 and K-28 wells which is planned to be conducted in the later part this year. The production from these two wells is anticipated to begin in 2024.

Additionally, a 3D seismic program at Kruh Block, including data acquisition, processing and interpretation will be conducted in early 2024. The result of this seismic program is expected to help IEC estimate the size and potential of new oil and gas reservoirs and upgrade some of the unproved reserves to the proved category.