Ramba to Sell 25% Stake in Lemang PSC in Sumatra to Risco for $157.5M
Indonesia-focused oil and gas exploration company Ramba Energy Limited (the Company or Ramba, and together with its subsidiaries, the Group) referred Monday to its previous announcements released May 25, 2013 and April 28 in relation to a strategic review of its working interest in the Lemang oil and gas block (Lemang Block) located in the Riau and Jambi provinces of South Sumatra, Indonesia.
The Board wishes to announce that it has on Sept. 21 signed a binding Letter of Offer (the Offer Letter) with Risco Energy Investments Holding Pte. Ltd. (REI) for REI to acquire a 25 percent direct working interest in the Lemang production sharing contract (Lemang PSC) from the Company’s Indonesian subsidiary, PT Hexindo Gemilang Jaya (the Proposed Transaction).
Ramba and REI (the Parties, and each a Party) has agreed to enter into a three-month exclusivity period during which time:
- REI will complete a due diligence on the Lemang PSC, amongst others
- The Parties will negotiate the key terms of the Asset Transfer Agreement (ATA) which will document the terms of this Proposed Transaction, the potential amendments to the Joint Operating Agreement (the JOA) and other enabling documentation (the Definitive Agreements)
- The Parties will also agree the scope, schedule and resourcing of the field development plan to ensure early partner alignment; and
- Ramba will secure the necessary regulatory and shareholders’ approvals for the Proposed Transaction
Under the terms of the Offer Letter, REI will pay a structured cash consideration of up to $157.5 million (Purchase Consideration) for the direct purchase of a 25 percent direct working interest in the Lemang PSC on a cash-free, debt-free equivalent basis, based on an effective date Jan. 1.
The Company will make such further announcements to inform shareholders of any updates or developments.
Oil and gas exploration is an expensive, high-risk operation. Shareholders are therefore advised to exercise caution when dealing in the shares of Ramba, and should consult their legal, financial tax and other professional advisers if they have any doubt as to the action to take.
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