Australia-based gas and ancillary power generation development company NuEnergy Gas Limited (NuEnergy) announced Wednesday that it has signed a Letter of Intent (LOI) with a strategic Asian investor (the Farm-in Party) for the farm-in to the Rengat production sharing contract (PSC) in central Sumatra, Indonesia.
Under the terms of the proposed Farm-In transaction the Farm-in Party will:
in return for being assigned a 49.9 percent participating interest in Rengat PSC located in central Sumatra, Indonesia. The proposed Farm-in Party has extensive experience in the Coal Bed Methane (CBM) service industry and with drilling and completion techniques that can significantly enhance the productivity of the CBM wells.
Key deliverables and time frames for completion of the agreement, as set out in the LOI, are as follows:
The total cash contribution under the proposed transaction of $3.58 million,or AUD 4 million, (minimum) will fund the drilling of additional pilot wells in NuEnergy’s South Sumatran PSCs to assist the ongoing work program to achieve commercial production.
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