CBM Asia Development Corp., Vancouver, (TSX: TCF) has reported that Medco Energi has signed a non-binding Memorandum of Understanding (MOU), to conduct the sale and purchase of coalbed methane gas produced during the dewatering stage at the Sekayu Coalbed Methane (CBM) Production Sharing Contract (PCS), South Sumatra, Indonesia.

Mr. Alan Charuk, president and CEO, comments, "This MOU will facilitate the early sale of coalbed gas from the Sekayu PSC, where CBM Asia earlier this month announced its NI 51-101 compliant Best Estimate of 1.062 trillion cubic feet of unrisked, recoverable gross prospective gas resources. We are currently assisting Medco's engineering staff to design the pilot production program, expected to be initiated during 1Q-2012."

Under the terms of the MOU, the Sekayu CBM PSC has been approved by Indonesia's upstream oil and gas regulator, BPMigas, to sell coalbed methane produced during the dewatering stage for local power generation. The parties involved are working to define terms of a Gas Sales and Purchase Agreement (GSPA) that would provide the basis for gas sales and deliveries which are expected to commence during 2012.