Blue Dolphin has signed a commitment letter with Blue Sky Langsa to acquire 70% working interest in a Technical Assistance Contract for the Langsa area, Offshore Indonesia in a non-cash transaction to be effective June 1, 2010.
The TAC Langsa area covers approximately 77 square kilometers within the Sumatra basin and contains two oil fields. Four wells have been completed in the Malacca Formation of which one well is active and three wells are idle. The fields are located in waters less than 325 feet deep. The active well is currently producing at approximately 620 barrels per day and is gathered via a floating production storage and barge vessel operated by Mitsui Ocean Development & Engineering (MODEC). An April 2010 third-party reserve study affirmed the net proven reserves were greater than 1.925 million barrels of oil.
In exchange for the assets, Blue Dolphin will issue to Blue Sky 24,000,000 shares of the Company's common stock. In addition, if the daily average production exceeds 1,500 barrel per day prior to the end of the first quarter of 2012, Blue Dolphin will issue an additional 16,000,000 shares of the Company's common stock to Blue Sky.
The closing of the transaction, which is subject to shareholder approval, is expected by the middle of August. The lifting of all other conditions and the signing of a definitive purchase and sales agreement is expected by the end of June.
Most Popular Articles
From the Career Center
Jobs that may interest you