Loon Inks PSA for Block L in Brunei
Loon Energy reports that a consortium led by Loon and QAF Brunei Sdn Bhd, has formally signed the Production Sharing Agreement with the Brunei National Petroleum Company Sendirian Berhad ("PetroleumBRUNEI") granting Loon and QAF the right to explore for and produce petroleum from Block L in Brunei Darussalam. Brunei is located in southeast Asia on the northern coast of the island of Borneo.
Block L is 550,000 acres (2,253 square kilometers) in size covering much of eastern onshore Brunei but also containing an offshore component. There has been some historic production on Block L however no exploration or development activities have been undertaken by any company in this area in roughly 20 years. The giant Champion and Seria oil fields are located within 25 kilometers of the block.
Under the terms of the PSA for Block L, Loon's consortium will, in the first 3-year period;
- reprocess all available existing seismic data (approximately 1,500 kilometers)
- acquire 750 line kilometers of onshore 2D seismic data and 500 line kilometers of 2D offshore seismic data
- acquire 150 square kilometers of offshore 3D seismic data
- drill at least two exploration wells to a minimum depth of 2,000 meters
- expend a minimum of US$20.5 million in the first 3-year period
Loon had previously announced in February that its consortium had been awarded Block L subject to the finalization of a Production Sharing Agreement between Loon et al and PetroleumBRUNEI. Loon had commenced its initial evaluation of the potential of Block L during the middle of 2005 and submitted its initial proposal on January 3, 2006.
Loon currently holds a 90% working interest in Block L along with QAF Brunei Sdn. Bhd holding a 10% working interest. Loon has been designated as the operator for the block.