Australia-listed Lion Energy has extended its reach into Indonesia, with the execution of a farm-in agreement that gives it a 35-percent working interest in onshore South Block A, North Sumatra, Indonesia, the company's partner Raisama Energy said Friday.
KRX Energy, a wholly owned subsidiary of Lion, is the entity representing Lion in the agreement. Raisama is the operator of the block.
The agreement states that in exchange for its working interest on the block, KRX Energy will pay $8 million of cash calls made by Raisama.
The block spans an area of 778 square miles (2,105 square kilometers). KRX Energy estimated that the block could contain 87 to 475 million barrels of oil and 370 to 1,994 billion cubic feet of gas.
"The farm-in [agreement] represents a relatively low cost entry into a significant portfolio," Lion said in a statement.
The participating interests in the block, after the farm-in agreement was executed, are as follows: Raisama with 51-percent stake, KRX with a 35-percent stake, and Indonesia's PT Prosys Oil and Gas International with the remaining 14-percent stake.
Lion has an existing 2.5-percent interest in the Seram (Non Bula) Block Production Sharing Contract (Seram PSC). Seram (Non Bula) PSC averaged 2,370 barrels of oil per day in 2011.
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