Singapore-listed Interra Resources Limited's subsidiary Goldwater Indonesia Inc. has signed an agreement Tuesday to acquire PT Benakat Barat Petroleum (BBP), which has a 100 percent interest in the Benakat Barat field in South Sumatra, Indonesia for $78.5 million.
Under the March 16, 2009 cooperation agreement with Indonesia national oil company PT Pertamina EP, BBP holds the rights and obligations of exploitation, development and complementary exploration of hydrocarbons in the Benakat field.
"The acquisition of BBP will increase the Company's existing reserves and enhance its current production of oil significantly," Interra said in an announcement on the Singapore Exchange.
Gaffney, Cline & Associates reported in May 2010 that the "proven plus probable" 2P reserves at the Benakat Barat field were at 19.9 million barrels. In addition, the firm believes that the acquisition is a strategic investment because the Benakat Barat field, which is located adjacent to Interra's Tanjung Miring Timur (TMT) field, produces oil from the same geological structures and formations as the TMT field. The acquisition allows Interra to create operational synergies due to the proximity of the two fields.
Interra will pay 80 percent of the purchase price for BBP in cash, with the remainder through shares in the company. The acquisition of BBP, which is subject to approval by relevant authorities in Indonesia and Singapore, is expected to be completed by June 2, 2014.
BBP's current shareholders are PT Indelberg Indonesia which owns 94 percent of BBP, with PT Bintang Sukses Nasional and Harry Sohar holding 5 percent and 1 percent, respectively.
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