Indonesia Energy Corporation announced production updates on its Kruh 27 and Kruh 28 wells. These two back-to-back discovery wells were drilled by IEC during 2022 at its 63,000-acre Kruh Block. Fracture stimulation of the already oil producing Kruh 27 well has been completed, with 80 thousand pounds of proppants having been injected into the sand producing reservoir with the goal of increasing production productivity.

A previous fracturing program conducted in IEC's Kruh 26 well brought the original production of 18 barrels of oil per day (BOPD) to a post-fracturing rate of 75 BOPD. IEC anticipates that the stimulation work at Kruh 27 could provide similar production enhancement after the well begins production again expected in January 2023. For Kruh 28, IEC plans to conduct a drill stem test in the new oil and gas bearing sand at a depth of 1,000 feet depth in January 2023.

During drilling of Kruh 28, more than 28% hydrocarbon gas was recorded with composition up to C5 (an indication of the presence of liquid hydrocarbons), suggesting a potential new oil and gas bearing formation. Production from the Kruh 28 well is expected in the first quarter of 2023. 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. Further, IEC announced that it is currently in negotiations with Pertamina (the Indonesian state-owned oil and gas company) for a five year extension of IEC's contract for Kruh Block. Instead of the current May 2030 expiration of this contract, this extension would move the expiration date to May 2035.

This extension would effectively give IEC 13 years to fully develop the existing 3 oil fields, and 5 other undeveloped oil and gas bearing structures at Kruh Block. In order to maximize the potential of Kruh Block after several encouraging new oil discoveries made by IEC during 2021 and 2022, IEC is planning to conduct significant new seismic operations across the entire Kruh Block. IEC believes that this new work, together with what has been learned from recent oil and gas discoveries, will greatly assist IEC in ascertaining the best locations conduct a continuous drilling campaign at Kruh Block that will look to develop not only the one formation currently being targeted, but to look to develop what appears to be at least three additional oil formations that could contain significant commercial quantites of oil and natural gas.

Completion and full interpretation of this seismic operations will take approximately 12 months, after which IEC plans to re-start its continuous drilling campaign at Kruh Block. IEC still plans on drilling a total of 18 new wells at Kruh Block, four of which have already been completed, by the end of 2025. IEC can conduct this new, potential maximizing seismic work based on its fundraising efforts during 2022, where IEC raised approximately $12 million (net of fees and expenses) from investors.