Ramba Energy Limited (Ramba) disclosed Monday that Mandala Energy Limited (Mandala) will farm in to a 35 percent participating interest in the Lemang Production Sharing Contract (Lemang or Lemang PSC) from Ramba’s subsidiary PT Hexindo Gemilang Jaya (Hexindo), subject to the approval of the Government of Indonesia.
Mandala will invest up to $179.6 million in Hexindo. This consists of:
Under another concurrent agreement, Hexindo shall acquire 15 percent of Lemang PSC from Eastwin (which currently owns 49 percent participating interest in Lemang PSC) such that the net effect of these transactions would result in Mandala, Hexindo and Eastwin holding 35 percent, 31 percent and 34 percent participating interest respectively in Lemang PSC.
Mandala is a South East Asia-focused oil and gas exploration and production company backed by leading global investment firm KKR. Mandala is led by an executive management team of 3 highly experienced, technically based co-founders with over 75 years of combined experience in oil and gas operations, and who have spent the majority of their careers in South East Asia. KKR partnered with Mandala in early 2015 to bring complementary technical and financial capability to regional independent and national operators across the exploration, development and production spectrum in order to drive portfolio growth and maximize asset potential.
This transaction provides an opportunity for Ramba to realize value from its investment in Lemang, and enter into a partnership which combines its local operating strengths with the technical and financial capabilities of Mandala. With an approved Plan of Development for the Akatara Field in place, Ramba and Mandala look forward to working together to bring first production online in the near term, appraising the significant upside in the field itself, and pursuing the material exploration potential of the Lemang block. Ramba and Mandala anticipate that the project will also enable the partnership to contribute to the Government of Indonesia’s goal of increasing national production.
“Mandala’s decision to select Indonesia as the location of its first transaction greatly underscores our view of Indonesia as a desirable investment destination. Mandala and Ramba’s collaboration is a unique coming-together of two partners with complementary skillsets, which we both look forward to leveraging. Despite the current low-oil-price environment, this partnership validates Ramba’s overall strategy and the positive economic returns we expect from the Lemang block. We look forward to a long-term partnership which goes beyond just Lemang,” said David Soeryadjaya, CEO of Ramba.
“For Mandala Energy, this marks an excellent first step in building our South East Asia portfolio. Combining Ramba’s local relationships and knowledge with Mandala’s technical and operational strengths will provide an ideal platform for securing early production whilst pursuing significant upside potential in the Lemang project,” said Barry O’Donnell, CEO of Mandala.
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