Mandala Acquires 2 Exploration Blocks in Sumatra, Adds to its Lemang Stake
Mandala Energy Ltd. -- a Southeast Asia-focused oil and gas exploration and production firm -- signed an agreement with Australia's Cooper Energy Limited Wednesday for the acquisition of two onshore exploration blocks in Sumatra, Indonesia, with the latest transaction becoming the company's second upstream asset purchase since its establishment in March 2015.
Under the agreement, signed in Jakarta, Indonesia, Cooper Energy will sell a 100 percent interest in Sumbagsel and Merangin III Production Sharing Contracts (PSCs), located in the South Sumatra Basin, to Singapore-based Mandala Energy for $8.25 million. The sale, effective Jan. 1, 2016, is subject to the approval of the Indonesian government.
"The acquisition of these two large PSCs marks a very important strategic milestone for Mandala Energy. From a portfolio perspective, it significantly increases our footprint in the prolific South Sumatra Basin and provides us with operatorship of two high quality exploration assets. We look forward to executing an extensive seismic and drilling program in order to quickly realize the potential of both blocks.” Mandala Energy Chief Executive Officer Barry O’Donnell said in a press release issued by Cooper Energy.
Last October, Mandala Energy made its first upstream asset purchase by acquiring a 35 percent stake in the Lemang PSC in Sumatra from PT Hexindo Gemilang Jaya -- the Indonesian subsidiary of Singapore-listed Ramba Energy Ltd. -- for up to $179.6 million. PT Hexindo has received approval from the Indonesian authorities to develop the Akatara field in the Lemang block, which consultant DeGolyer & MacNaughton estimated in a 2011 study to hold prospective resources of around 511 million barrels of oil and 468 billion cubic feet of condensate.
Mandala Energy is supported by global investment company Kolhberg Kravis Roberts & Co. (KKR), which offers complementary technical and financial capability to regional inpendendent and national operators in the oil and gas exploration and production sector to drive business growth and maximize asset potential.
The sale of the two PSCs in Sumatra was the result of a process initiated by Cooper Energy in the December 2015 quarter to divest its Indonesian portfolio and focus domestically on the eastern Australian energy market.
“Today’s transaction marks another important step in our strategy to concentrate Cooper Energy’s resources and efforts on the eastern Australian energy market” Cooper Energy's Managing Director David Maxwell said in the press release, adding that the asset sale “will provide timely capital management benefits as we move towards a Final Investment Decision on the Sole Gas Project”.
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