Under the terms of the transaction, AWE will contribute up to a maximum of US$12 million primarily towards the drilling of two offshore wells to earn a 42.5% interest from Pearl Oil (Satria) Limited, a wholly owned subsidiary of Aabar Petroleum Investments Company PJSC ("Aabar"), a company listed on the Abu Dhabi Securities Market.
The transaction is subject to the written consent of the government of Indonesia and the Indonesian regulator, Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi. After approval of the transaction by the relevant authorities, and completion of the earning program, interest holders in the Bulu PSC will be AWE (42.5%), Aabar (42.5%), PT Satria Energindo (10%) and PT Satria Wijaya Kusuma (5%).
The Bulu PSC covers an area of approximately 3,495 square kilometers and is located approximately 40 kilometers off the northeast coast of East Java in the East Java Sea. The area has water depths of up to 60 meters.
The East Java sedimentary basin is a significant oil and gas producing region and the area surrounding the Bulu PSC contains a number of oil and gas accumulations, including the important Pangkah, Poleng and Kepodang fields.
The drilling activity within the Bulu PSC area is expected to commence in the third quarter of 2007, with both the Lisah-1 and Lengo-1 wells to be drilled in the campaign.
Aabar (42.5%) is an experienced oil and gas operator throughout the region, and has net production of approximately 20,000 barrels of oil per day from four fields in Indonesia and Thailand. Aabar is operator of the Bulu PSC and the upcoming drilling program.
PT Satria Wijaya Kusuma (5%) is a company incorporated in Indonesia and whose shareholders are Mr Wisnu Suhardono and Mr Gunawan.
PT Satria Energindo (10%) is a company incorporated in Indonesia and whose shareholders are Mr Wisnu Suhardono, Mr Anton Subowo, Mr Yanto Sumantri and Ms Rias Lukysari.
AWE's managing director Bruce Phillips said:
"This transaction is consistent with AWE's stated objective of diversifying the company's asset base beyond Australia and New Zealand in the future. AWE has evaluated a substantial number of investment opportunities in Indonesia over the last 18 months, and this initial transaction is the first which has met our technical and commercial risk criteria. We look forward to working co-operatively with our joint venture partners and the Indonesian authorities to achieve success for the benefit of AWE's shareholders and the broader community in Indonesia."
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