At Sebatik, in the Tarakan Basin close to the Malaysian border in East Kalimantan, Star Energy signed a 30 year production sharing contract (PSC) in October 2005, commencing exploration in an area which has been almost untouched for more than a quarter of a century.

The Sebatik PSC covers 2,132 square kilometers in the Nunukan Sebatik area, 570 km north of Balikpapan and 1,600 km NE of Jakarta. 35% of the block is onshore, 65% offshore. Star Energy owns 75% interest and is the Operator of the block.

Although first drilling was conducted by the Dutch in 1912, the area around the Sebatik Block experienced very little exploration during the first half of last century. Since 1975, one commercial oil field and four significant gas discoveries have been made, however, confirming the potential of the northern Tarakan Basin.

In late 2006 Star Energy successfully completed a 524 kilometer 2D seismic program onshore Nunukan and Sebatik Island to probe beneath the surface and identify prospects which will be drilled in 2010, after Star Energy takes on a new partner to share its vision for this highly prospetive area.