Oz Lion Energy Exits South Block A in Indonesia
Australia-listed but Indonesia-focused Lion Energy July 24 said it has executed an agreement to sell its holding in South Block A (SBA) to Blue Sky Resources for a nominal amount but retains a right to a production royalty with a maximum value of $4.5mn.
Under the terms of an existing royalty agreement, Lion is entitled to a royalty equal to 0.8% of the revenue derived from the SBA production sharing contract (PSC) up to a maximum of $4.5mn. The royalty will accrue and become payable once 50% of the SBA PSC cost recovery pool at first oil has been recovered. Completion of the sale is subject to approval of the government of Indonesia, Lion said.
This sale largely completes Lion’s non-core asset sale process, company’s executive chairman Tom Soulsby said. The company will now focus on building a portfolio of production and development assets in southeast Asia with an initial focus on the Seram Island interests, he said. Lion, through its wholly owned subsidiary Lion International Investment, holds a 2.5% participating interest in the Seram (Non Bula) Block PSC onshore Seram Island in eastern Indonesia. The PSC covers an area of 1,524 km2.