Jadestone Energy International Holdings Inc., a wholly-owned subsidiary of Jadestone Energy Inc., which is listed on the TSX Venture Exchange, is acquiring 50 per cent in the Ogan Komering Production Sharing Contract, Sumatra, Indonesia, the company said in a statement Tuesday.
The company further said it had closed the acquisition for a total consideration of US$5.8 million, and had funded the deal funded from cash on hand.
Jadestone, as buyer, and Jadestone Energy Limited (JEL), as guarantor, have signed a definitive Sale & Purchase Agreement (“SPA”) with Repsol Oil & Gas Canada Inc. (“Repsol”), as seller, for the acquisition of all issued and outstanding shares in Talisman (Ogan Komering) Ltd. (“TOKL”). TOKL holds a 50 per cent equity interest in the PSC. The SPA was signed and the acquisition closed concurrently.
Headquartered in Singapore, Jadestone is currently engaged in production, development and exploration and appraisal activities in Australia, Indonesia, Vietnam and the Philippines.
Following a recent strategic review, its also focusing on acquiring assets with production in the near term, and where significant follow-on reinvestment opportunities exist to enhance value, as well as undeveloped discoveries which may be rapidly brought to production.
The PSC’s corresponding block is located in South Sumatra, Indonesia. The remaining fifty percent (50%) in the PSC is held by PT Pertamina Hulu Energi Ogan Komering (“Pertamina Ogan Komering”), an affiliate of PT Pertamina Persero, Indonesia’s national oil company. TOKL, together with Pertamina Ogan Komering, operates the PSC through a joint operated body. The production rate of the Ogan Komering block since the acquisition effective date of July 1, 2016 has averaged 3,000 barrels of oil equivalent (“BOE”) per day (gross); approximately seventy percent oil and thirty percent gas.
Executive Chairman, Paul Blakeley said, ”This is a key first step for Jadestone Energy to open up opportunities in Indonesia and to establish ourselves as a partner of choice with Pertamina through being joint operator in Ogan Komering. We are also delighted to have worked closely with Repsol and successfully concluded our first transaction with them, as we continue to transform our business to become a significant oil and gas production and development company across Asia Pacific.
Ogan Komering also provides the platform to renew relationships with the Indonesian oil and gas regulators MIGAS and SKKMigas and we welcome the experienced team of employees, whom I have known for many years with Talisman Energy, who will transfer to Jadestone Energy (Ogan Komering) Ltd.
Ogan Komering is well understood by us, and will bring important cash flows to the Company today, but more significantly has the potential for low-cost, early development of recent gas discoveries, to provide growth going forward. Working cooperatively with Pertamina, this will help to meet growing local energy demand into 2018 and beyond.
The Company is now equipped with a small but very experienced team in Indonesia, with a number of exciting investment options to target on the license, plus a wider set of M&A options in this new core area in Indonesia, to create further value for our shareholders.“