Rion Energy holds 22.5% of the Seruway Production Sharing Contract (PSC), offshore northeast Sumatra, which includes the undeveloped Gurame Gas Field, with estimated recoverable reserves in the range 400 -2,700 Bcf plus 20-150 million barrels of condensate. This field was discovered and delineated between 1967-1972 when there was no regional market for gas, and is strategically located 50km from the major Arun LNG plant.
The acquisition will represent a significant addition to Cooper's international oil and gas portfolio and will result in a second major impact well being drilled in Indonesia after Kurnia-1 (COE share: 30%) on South Madura.
The offer for the acquisition of Rion Energy is 13 million Cooper Energy shares with a notional face value of A$0.50. The Directors of Rion Energy have accepted the offer and will recommend it to their shareholders. Shareholder acceptances totaling 87% have been received to date.
The Seruway PSC was awarded on 12 December 2004 and is currently in year 3, with all firm commitments to date met by the Joint Venture and one well remaining to be drilled to meet the year 3 commitment. The Joint Venture has recently acquired 100km2 of high-quality 3D seismic over the Gurame gas field to better define the field and to locate a delineation/appraisal well that will be drilled towards the end of 2007.
In addition to the Gurame Gas Field, the Serway PSC also contains a number of other discovered but undeveloped gas fields, several mature prospects and a further 35 leads and prospects, which will require new seismic to mature for drilling. These other leads and prospects are estimated to have a total recoverable reserve potential of greater than 10 Tcf of gas and 500 million barrels of condensate.
Cooper Energy's Chief Executive, Mr Michael Scott, said that the Rion Energy acquisition represented an exceptional quality addition to its Indonesian portfolio and has the potential to provide Cooper Energy with a major development project in the very near future."
"What really impressed us is the quality of the technical data set over existing gas discoveries and the large number of leads and prospects within the block. Assets of this quality are extremely difficult to obtain for small E&P companies in an industry that is generally considered to be opportunity constrained at present."
"In addition to the gas discoveries, there is also the potential for oil." Mr Scott said. "With regards to the Gurame gas field, we have log data from 5 wells, we have just completed a 3D seismic acquisition and an appraisal well is planned towards the end of this year. This dataset will hopefully enable us to accelerated monetization of the asset and enable us to embark on a major gas development project in the near future."
The Joint Venture participants in the Seruway PSC are:
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