Singapore listed GSS Energy Limited Tuesday said it would invest $5 million in another SGX-listed entity – Ramba Energy Limited – to join the latter’s oil and gas exploration and production facilities project in Indonesia.
The deal will see GSS Energy participate in Ramba’s exploration program at the West Jambi block in Sumatra, Indonesia. Two onshore wells in this block are expected to be drilled commencing in the second half of this year.
RISC Operations Pty Ltd, an international petroleum consultancy company has reviewed 9 prospects and 8 lead wells at the West Jambi block and has identified approximately 426 million barrels of un-risked gross prospective potential oil equivalent (mmboe) and risked gross prospective oil potential of 83 mmboe.
GSS Energy’s investment and its participation in Ramba’s exploration program represents a strategic geographic expansion from its Central and East Java operations into Sumatra through the West Jambi block, which will enhance its overall growth potential, the company said in its regulatory filing.
According to the chief executive of GSS Energy, Sydney Yeung, this block had great production potential, and he added that the company expected its investment to yield good economic returns after the successful drilling of the two wells commencing in the second half of this year.
“The West Jambi agreement with Ramba represents a great addition to our portfolio for our shareholders to benefit from Indonesia’s exciting oil and gas sector. As the largest economy in Southeast Asia, Indonesia’s continued growth is dependent on access to energy, specifically oil and gas. GSS Energy is committed to strategically investing in the near-production or producing oil and gas sector across the country,” he said.
David Aditya Soeryadjaya, CEO of Ramba, said, “I believe that this investment is also a result of the recent improvement in the oil and gas industry, where recently Brent rallied to almost $70/barrel, which is a 2015 high. This improving sentiment definitely benefits E&P companies such as Ramba.
This also marks the third investment that the Ramba has received in the past month, and Soeryadjaya said it demonstrated that regional investors were viewing the company’s strategy and oil and gas portfolio favourably. “Having raised around S$30 million in total funds, Ramba is well capitalised to continue in its oil and gas work programme in Indonesia,” he added.