Fulucai to acquire Indonesia oil fields
Wednesday, December 4 2013 - 12:27 AM WIB
Calgary-based firm Fulucai Productions Ltd. announced Tuesday that that it has entered into an MoU with Blue Sky Langsa Ltd. (BSL) to acquire certain oil and gas interests in North Sumatra, including offshore leases and equipment.
The asset is known as Langsa TAC and is a 77 square kilometer offshore concession in 325 feet of water depth, 55 kilometers from the North Sumatra shoreline. The block has 2 discovered fields, known as the L and H fields, and 7 wells. Historic sunk costs for the Langsa TAC are approximately US$59.5 Million. Mobil Oil initially made the discovery in 1980.
Under the terms of the agreement, Fulucai will acquire 100% of the shares of BSL from the BSL shareholders for $7.5 Million consisting of $1.0 million cash at closing and $6.5 Million to be paid from 15 percent of cash flow (net to BSL's interest) generated by Langsa TAC. At closing, BSL will hold a total of 65 percent interest in Langsa TAC.
Following execution of the MOU, the company will proceed to conduct due diligence on BSL, including evaluation and field inspection of the properties, prior to the execution of the SPA. The company hopes to finalize the Share Purchase Agreement by December 31, 2013 and close the acquisition by January 15, 2014, with an effective date of January 1, 2014.
Langsa TAC has been developed with 6 subsea wells, and are currently producing at a rate of approx. 340 barrels of oil per day and zero water-cut from one well via a dedicated leased Floating Production and Storage and Offloading (FPSO) Vessel. The remaining development wells are shut-in and are workover candidates to recover additional oil.
The plan is to increase production from the fields. Planning is advanced to complete the suspended H-3 well for production of oil from the undeveloped northern part of the H Field, and to workover selected shut-in wells. The H-3 exploration well drilled by Mobil tested oil at rates of over 3500 bopd before being suspended for future production. The expectation is that after a successful Workover Program the field could be producing at an initial rate in excess of 3000 bopd.
Editing by Reiner Simanjuntak