Nido Petroleum Limited announced that it has executed three separate Farm-in Agreements with Lundin Petroleum B.V. to participate in the Gurita, Baronang and Cakalang Production Sharing Contracts (PSCs) located in the Penyu and West Natuna basins, offshore in the Republic of Indonesia.
Under the terms of the Baronang and Gurita Farm-in Agreements, Nido will earn a 10 percent participating interest in each PSC by paying a disproportionate share of the exploration costs associated with the drilling of the exploration wells in the Baronang and Gurita PSCs and paying 10 percent of the past costs for each PSC. In relation to the Cakalang PSC, Nido will earn a 10 percent participating interest through payment of its pro-rated 10 percent share of past costs for this PSC. In addition, Nido will be responsible for its 10 percent share of future costs in these three PSCs.
Nido has the right to increase its participation interest in each of these three PSCs, up to a maximum of 20 percent, prior to the commencement of the drilling campaign, on the same terms.
The exploration wells in the Gurita and Baronang Contract Areas form part of a much larger rig-share program being coordinated by Premier Oil on behalf of Lundin. Lundin expects to commence drilling a back-to-back program in the fourth quarter of 2013, subject to finalization of the drilling contract and well sequencing.
The assignments of interest contemplated under the three Farm-in Agreements are subject to the approval of the Government of the Republic of Indonesia's oil and gas regulator, SKKIMGAS.
Nido's Managing Director Phil Byrne stated: "I am extremely please to progress our slated strategy of increasing Nido's footprint in the South East Asian region through these farm-in agreements. We have been assessing a range of farm-in opportunities for a number of months and believe participation in these three PSCs represents a measured opportunity for Nido shareholders to participate in a near-term exploration drilling program in prospective basins with proven petroleum systems."
"The Indonesian work program, as well as the previously announced Baragatan well in the Philippines, will be funded from Nido's cash reserves and forecast production revenue from the Galoc field. Lundin has demonstrated that it has a highly competent and successful team and Nido looks forward to working closely with Lundin in the exploration of this attractive portfolio," Byrne said.
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