SPC Enters Into Revenue Sharing Arrangement on Jeruk Field
The Board of Directors of Singapore Petroleum Company Limited reports that the Company has, through its wholly-owned subsidiary, Singapore Petroleum Sampang Ltd, entered into a Jeruk Project Agreement with Cue Sampang Pty Ltd and Medco Strait Services Pte Ltd, a subsidiary of PT Medco Energi Internasional Tbk. to share the costs and revenue in respect of the Jeruk field.
In April 2005, SP Sampang reinstated its 40.0 percent interest in the Jeruk oil discovery. With the reinstatement, SP Sampang is liable to pay a premium in kind to Santos Pty Ltd, operator of the Sampang Production Sharing Contract, of approximately US$145.0 million out of a Jeruk production.
Under the Agreement, SP Sampang will transfer approximately 18.2 per cent out of its 40.0 per cent economic interest in the Jeruk field to Medco Strait in exchange for Medco Strait agreeing to reimburse 90.9% of the SPC Premium, amounting to approximately US$132.0 million. With this arrangement, SP Sampang is able to benefit from early cash flow from a future Jeruk production. This Agreement is solely for the Jeruk field and does not affect the rest of the Sampang PSC.
In addition, SP Sampang will receive from Medco Strait approximately US$16.0 million in reimbursement of Medco Strait's proportionate share of the past Jeruk drilling costs and working capital expenditure paid up.
Cue has entered into a similar arrangement with Medco Strait for its share of the economic interest in Jeruk field.
The new economic interest in Jeruk field is approximately:
SP Sampang 21.8%
Medco Strait 25.0%
Apart from the above Jeruk arrangement, SP Sampang's interest in the Sampang PSC remains unchanged at 40.0 per cent.
The above arrangement will not have any material impact on the earnings per share and the net tangible asset per share of the SPC group of companies for the current financial year.
SPC is a regional oil and gas company with interest in oil and gas exploration and production, refining, terminalling and distribution, marketing and trading of crude and refined petroleum products. It is an associated company of Keppel Oil & Gas Services Pte Ltd, a wholly-owned subsidiary of Keppel Corporation Limited.
SPC holds its interest in the Sampang PSC through its wholly owned subsidiary, SP Sampang.
The Jeruk field is located offshore East Java about 42 kilometers east of Surabaya in water depth of 44 meters.
Acquisition of a 3D seismic survey over the Jeruk field and other areas of the Sampang PSC has been completed. The processing and interpretation of the survey are expected to be completed in early 2006. Additional wells have been planned for 2006 to determine the full potential of the Jeruk discovery.
Beside the Jeruk appraisal, there are plans to drill up to three exploration wells in other prospects within the Sampang PSC in 2006.
Participants in the Sampang PSC are:
SP Sampang 40.0%
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