Jadestone Buys Stake in Indonesia Gas Asset
Singapore-based Jadestone Energy has signed an agreement with Mandala Energy Lemang to acquire an operated 90% interest in the Lemang production sharing contract (PSC), onshore Indonesia, for a total initial headline cash consideration of $12mn, it said on June 29 in a statement.
The block includes the Akatara gas field, which was previously developed as an oil producing asset, but has a best estimate gross undeveloped wet gas in place of approximately 115bn ft3 which, at 90% interest, equates to unrisked 2C resources of 55.2bn ft3 sales gas, 2.2 mm barrels of condensate, and 5.8mn boe of liquid petroleum gas, Jadestone said.
“The asset has been substantially de-risked with 11 wells drilled into the structure, plus three years of oil production history, up until the field ceased production in December 2019, after reaching its economic limit for oil production,” the company said.
The remaining 10% working interest in the PSC is held by Hexindo Gemilang Jaya and, as is customary in Indonesia, the local government has a back-in right under the PSC, for up to a 10% working interest, at the time of development sanction, the company said. If exercised, this would result in an 81% interest, net to Jadestone.
The company plans to fund the transaction via its cash resources, and certain subsequent contingent payments. In addition to the initial payment of $12mn, further consideration of US$5mn is payable upon first gas, in addition to further contingent payments of up to $26.7mn, which may be triggered in the event that certain upside outcomes occur, Jadestone said.