PT Sugih Energy Tbk, an Indonesian integrated energy services company, completed the acquisition of a 55 percent participating interest in the Selat Panjang Production Sharing Contract (PSC) in Riau province, Sumatra, Indonesia.
The completion of the acquisition followed its conditional share purchase agreement April 18 of PT Petronusa Bumibakti and International Mineral Resources, Inc. (IMR) for approximately $88.8 million. Sugih gained control of the 55 percent stake in Selat Panjang PSC from block operator Petroselat, Ltd., which was jointly owned by Petronusa Bumibakti and IMR.
Selat Panjang PSC current produces approximately 300 barrels of oil per day and it is expected to produce approximately 5 million cubic feet of gas per day starting in 2013.
"The completion of this acquisition is a major accomplishment for Sugih, as the Selat Panjang will become our first producing asset. We expect production from this asset to immediately impact our balance sheet and positively impact our financial performance for fiscal year 2013," President Director of Sugih, Andhika Anindyaguna, said in a company release.
"Furthermore, the Selat Panjang block fits with Sugih's strategy of acquiring lower-cost assets located in proven onshore basins in Indonesia. We are confident that this asset - along with the rest of our portfolio - holds significant exploration upside, which will deliver value to our shareholders," Anindyaguna added.
Selat Panjang PSC, which covers a total area of 506 square miles (1,311 square kilometers), consists of 2 major zones, Sihapas and Pematang. The Sihapas zone has been in production since 1994 with average total annual production of 99,962 barrels of oil. The Sihapas zone has remaining proven and probable (2P) reserves of approximately 7.28 million barrels of oil, while the Pematang zone has recoverable 2P reserves of approximately 32.7 million barrels of oil and 245 billion cubic feet of gas.
Geological and geophysical studies and a 3D seismic program indicated that the Selat Panjang PSC has 7 prospects with total resources of approximately 323 million barrels of oil and 1,455 billion cubic feet of gas.
PetroChina's subsidiary PetroChina International Selat Panjang Ltd. holds the remaining 45 percent participating interest in the Selat Panjang PSC.
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