AED Oil says that the onshore exploration well Gigir East-1 on its 60% owned South Madura Project has commenced drilling and was spudded on July 30.

The rig is expected to take approximately 15 days to drill the well to a total depth of approximately 1,300 meters. A depth versus time curve for the well is attached to this announcement.

Should hydrocarbons be discovered, and the logging results are positive, it is planned to evaluate the reservoir by flowing the gas to surface via a cased hole production test.

In the event of a discovery and successful production test it is planned to suspend the well as a future potential production well which could be quickly developed for the local domestic market. In the event of no discovery or an unsuccessful production test, the well will be plugged and abandoned.

Future exploration activity is likely to concentrate on deeper play types including that identified by the Kurnia-1 well, drilled by the Joint Venture Partners in 2007-2008. The Kurnia-1 well is located in the south of the Contract Area and identified a four way dip closure in two main structures.

Mr. David Dix, Executive Chairman commented, "The drilling of Gigir East-1 on Madura Island marks a significant milestone for AED as it is the first well that the company has drilled in Indonesia since its expansion into the South East Asia region. South Madura, along with the uniquely exciting prospect of Rombebai which the company hopes to drill in late 2010 / early 2011 represent significant opportunities for the Company and are the first step in realizing the strategy to identify, explore, develop and commercialism high impact oil and gas opportunities in the Asia Pacific region."

Tags: AED Oil