# 1 Executive summary

PKM has commissioned Austar Gas Pty ltd to provide a resource estimate for its interest in the Prisma Kampung Minyak (KM) asset in Indonesia. The evaluation was performed in February 2017 using the updated field production data until 31st December 2016 and technical information provided by PKM.

On 15th July 2011, a 15-year production enhancement contract (KM KSO contract) was signed for KM field in Indonesia between Pertamina and Prisma Kampung Minyak companies. Kampung Minyak was later acquired by PKM and thus PKM is entitled to receive 25% of any extra oil production above the baseline oil forecast after cost recovery.

KM Oilfield was discovered in 1896 and has a producing area of 45 square kilometres. The field is located approximately 200 km south of Palembang City in South Sumatra Island, Indonesia. There are nearly 330 vertical wells in this area and 30 wells online in 2016 with oil production. During the development, operators have tried technologies such as water reinjection and hydraulic fracturing to advance field production. However, despite success from some of the water injection trials, oil production remained in a low level due to lack of proper understanding of reservoirs and inconsistency in water injection. PKM has started a work program since the start of its contract to enhance oil production by drilling new injectors/producers and recompletion (water shut-off, artificial lift design) of key old producers.

Detailed Geophysical and petrophysical studies on the existing seismic data and log correlations over KM field has divided the KM field into 9 separate blocks from north west to south east. The entire KM field appears to be affected by faulting and has a limited reservoir continuity between the blocks.

There are two main geological formations present in the KM field, the Muara Enim Formation and the Air Benakat Formations. KM has an original estimate of approximately 65.92 million barrels of original oil in place (OOIP) which are mainly located in Muara Enim Formation (named as STC to S7 layers) with a depth range from 90m to about 470m. Reservoir layers in Muara Enim Formation are channel sand bodies belong to water delta and generally have good thickness and reservoir properties. Muara Enim Formation contains layers with varying thickness (up to 12m) and has an average porosity of 28% with permeability ranging from 50 to 120md. Air Benakat Formation consists of deeper formations (S8 to S13) with poor reservoir properties. Among those, layer S8 has been productive with some production history and it has been included to the main package for the contingent resource estimate. Productivity and reservoir characteristic of layers S9-S13 are yet to be confirmed through further production testing and technology trials.

API gravity is ranging from 35 to 45 which suggests that KM oil is a good quality. A constant formation volume factor of 1.15 was used for all zones as reported by PKM. There is also very small amount of gas produced which is not normally measured by the company. The average porosity in Muara Enim Formation ranging from 31% in STC to 24% in S7 and is equal to 16% in S8-S13. Initial water saturation was derived by client as 35% in STC-S7 and 40-45% in S8-S13 which are considered reasonable. Due to shortage of time, Austar Gas has used the information from the top structure