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Bass Oil Ltd: DEEP DIVE

Bass Oil targets full production capacity for onshore Indonesian oilfield

Oil producer Bass hopes to hit a production milestone and add onshore assets.
oil barrels lined up
OVERVIEW: BAS The Big Picture
Bass’ March quarter stake of production from Tangai-Sukananti oilfield was 12,626 barrels
  • Last month the company took a return from 12,626 barrels of oil
  • The monthly realised price was US$62.49 while costs at the field were US$25 a barrel or less

What does Bass Oil do?

Bass Oil Ltd (ASX:BAS) is focused on expanded oil production in the South East Asian nation of Indonesia. It is targeting full production capacity at its Tangai-Sukananti oilfield onshore Indonesia and is on the hunt for new onshore acquisitions in the country near oil production infrastructure.

The company’s corporate strategy is to build a diversified portfolio in Indonesia of assets at the exploration, development and production stage. It envisages three stages of development as it works towards overarching goals of strategic growth, value creation and value optimisation.

These stages involve company transformation, material growth and optimisation of assets and technologies utilised. All three stages involve assessing and potentially acquiring new assets.

Bass is run by managing director Giustino ‘Tino’ Guglielmo, a mechanical engineer with more than 39 years of industry experience. A petroleum industry advisor, Guglielmo has led companies for the past 16 years. He previously headed up both Ambassador Oil & Gas and Stuart Petroleum Ltd as an MD, adding significant shareholder value to their market assessment before the entities merged with larger companies.

The experienced company director has served on a number of boards, including the board of Octanex NL, and previously held business improvement and production management roles at Santos Ltd (ASX:STO) and Schlumberger.

What does Bass Oil own?

The key asset is the Tangai-Sukananti oilfield which is housed in a joint venture for which Bass takes returns from about 55% of oil barrels marked for sharing by the JV.

Last month, the oilfield produced 22,957 barrels of oil for JV share, with 12,626 barrels of oil net to Bass.

The daily average of 740 barrels of oil JV share in March 2019 was a 7% month-on-month increase from February 2019.

The average monthly realised oil price in March was US$62.49, with field operating costs being US$25 per barrel or less. The raw gap between the figures is $37.49 a barrel, a sum that may not include other costs of goods sold.

PT Pertamina has given Bass approval to tender for a 750-horsepower-capacity drilling rig for the drilling of the Bunian 5 well.

Bass hopes to start drilling after appointing a tenderer and double field production to take up all the remaining production capacity at the field.

The company hopes to add new ground onshore to its portfolio in Indonesia and is targeting assets near oil production infrastructure.

An average oil price of US$59.58 was achieved during the March quarter of 2019 and net oil production for March quarter totalled 35,373 barrels and about 700 barrels of oil per day gross daily production.

March quarter 2019 production was a 30% improvement on the March quarter of 2018 and an 11.4% quarter-on-quarter reduction when compared to the December quarter of 2018.

Net oil sales in March quarter 2019 were up 25% year-on-year but down 14.1% quarter-on-quarter.

Bass had US$1 million cash on March 31, 2019, an 18.3% increase when compared to December 31, 2018.

Inflection points

  • Drill tender award and execution

  • Increase of Tangai-Sukananti production capacity up to full capacity

  • Acquisition of new oilfield ground and assessment of suitability of nearby production infrastructure

  • Oil price dynamics and industry sentiment

  • Milestone achievements and significant transactions

Managing director Tino Guglielmo outlines strategy

“Bass is extremely focused on its existing field production optimisation, development drilling program and business development strategy,” Bass Oil managing director Tino Guglielmo said two weeks ago as the company released its March quarterly report.

“The team has identified and is targeting the acquisition of some exciting growth opportunities in the prolific oil and gas basins of Indonesia.

“Its partnership with highly-credentialed local universities and collaborators continues to target improved recoveries from existing fields and in potential acquisition targets.

“Finally, our three-tiered business development strategy has identified further opportunities for the short list which are being pursued with vigour.”

Guglielmo had told Proactive Investors last month: “The Bunian 5 well is going to be at least as good as the Bunian 3 well was ... it’s not a stretch for post-drill Bunian 5 to take us to our capacity.

“It’s a low-risk and very high-impact well for us, and as a result we’re very keen to drill it.”


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