AEM?s acquisition of Wailawi project nearing completion
Thursday, July 12 2012 - 01:26 AM WIB
Australia-listed firm Artist & Entertainment Group Ltd (AEM) announced that its intention to acquire an interest in the Wailawi oil and gas project in Indonesia is in progress and nearing completion.
AEM has previously announced that it was seeking to take up an interest in the Wailawi project, in Balikpapan, East Kalimantan, by way of an assignment of rights from Union Pacific Trading Pty Ltd (UPT) and UPT?s Indonesian subsidiary.
Over the past few months, UPT has been engaged in a process to enter into an agreement with Indonesia?s upstream oil and gas regulator BPMigas and Perusda Benuo Taka, a company owned by East Kalimantan?s Panajam Paser Utara regency administration, for a new production sharing contract of the Wailawi oil and gas project.
?AEM is pleased to confirm that it has been advised that the drafting of the agreement between UPT?s Indonesian subsidiary, Perusda Benuo Taka (Perusda) and BPMigas is in progress and nearing completion,? AEM said in a statement obtained by Petromindo.com late Wednesday.
?This agreement will entitle UPT?s subsidiary to receive a share of the net project earnings generated from the Wailawi Project on the condition that it meets its obligations under a Production Sharing Contract with Perusda and BPMigas, including undertaking further exploration activity in the Wailawi Project area,? it added.
The Wailawi project was discovered in 1975 and brought into production in 1979 and was a significant gas producer from only four wells with peak production reaching 18 million cubic feet of gas per day in 1985. Two more wells were drilled in 1986 with production continuing until 1999.
Following the Asian financial crisis of the late 1990s, gas and oil prices went down to extremely low levels. This resulted in the field being placed on ?care and maintenance?.
In October 2005, Perusda entered a Production Service Agreement with BPMigas. This resulted in the field being put back into production.
Editing by Reiner Simanjuntak