Coro Revises Deal Terms for Indonesia's Lengo
UK-listed Coro Energy said July 18 that it has renegotiated the terms of its proposed acquisition of a 42.5% interest in the Lengo gas field, offshore Indonesia.
The original terms of the acquisition of the Bulu production sharing contract were announced in September last year, with the value of the deal set at a little over $12mn. Under that deal, southeast Asia-focused Coro was to pay a cash consideration of $ 6.96mn and back costs and other working capital adjustments estimated at approximately $1.04mn to Australian AWE on closing of the acquisition. Up to $4mn in new Coro ordinary shares were to be paid to HyOil (Bulu).
Under the revised acquisition terms, the cash consideration and the reimbursement amount payable by Coro to AWE will now be payable in four tranches: a sum of $2.5mn on completion of the acquisition which will include $1.46mn of the cash consideration plus the reimbursement amount; $1.5mn on September 1, 2020; $2.5mn on the sooner of (i) a final investment decision; or (ii) July 1, 2021; and $1.5mn on the sooner of (i) the date of commencement of commercial production or (ii) December 31, 2022.
All other terms of the acquisition remain as originally announced, including the payment of the equity consideration payable to HyOil in three tranches.
Coro said last year it is stepping in to a deal that was originally agreed between AWE (Satria) NZ, a subsidiary of Australia’s AWE (the current asset holder) and HyOil Bulu, a subsidiary of Singapore’s HyOil. This current transaction is being effected through both a tripartite agreement between Coro, HyOil and AWE, (in which the original sales & purchase agreement (SPA) between HyOil and AWE is terminated); and a new SPA between Coro and AWE.
The field has independently certified gross 2C resources of 359bn ft3 of recoverable dry gas with gross 3C resources of 420bn ft3representing additional upside, Coro said in September. The field development plan has been approved by the Indonesian authorities.
Other shareholders in the Bulu PSC are operator Kris Energy (42.5%) and local partners, Satria Energindo (10%) and Satria Wijaya Kusuma (5%).