Fulucai to acquire smaller stake in Langsa TAC
Wednesday, August 6 2014 - 12:48 AM WIB
Calgary-based Fulucai Productions Ltd. announced Wednesday that it has entered into an amended Memorandum of Understanding (MOU) with Blue Sky Langsa Ltd. (BSL) to acquire interest in an Indonesian oil and gas asset.
The company said in a statement that under the terms of the amended MOU Fulucai will be replacing its previously proposed acquisition of 15 percent working interest in certain oil and gas interests offshore North Sumatra known as Langsa Technical Assistance Contract (TAC) with a 5 percent carried interest.
?Under the terms of the amended MOU, the company will acquire a 5 percent carried interest in the Langsa TAC for US$306,189 and shall issue 1,000,000 shares of the company at a deemed price of $0.40 per share to satisfy the purchase price amount,? the statement said.
The effective date has been amended to May 1, 2014 and the closing date is August 14, 2014, it added.
On closing, Fulucai shall be assigned 5 percent of Langsa TAC including its proportionate share of the Sunk Cost Pool, which is $61,237,895 as of December 31, 2013 ($3,061,894 net to Fulucai) plus all wells producing and non-producing (L1, L2, L3, L4, H3, H4) and all equipment on the subject wells.
Fulucai announced on May 29 that it had entered into an MOU with BSL to acquire a 15 percent interest in the Langsa TAC, which is a 77 square kilometer offshore concession in 325 feet of water depth, 55 kilometers from the shoreline. The block has 2 discovered fields and 7 wells with historic sunk costs of approximately US$61.2 million. Mobil Oil initially made the discovery in 1980.
Under the terms of the May 2014 agreement, the company will acquire the 15 percent working interest in the Langsa TAC for US$918,568 consisting of cash at closing and payment for 15 percent of the direct costs for the 2014 work program (WP2014) which was estimated to be approximately $8.877 million. This is a related party transaction. The controlling shareholder of Fulucai is the President of BSL.
Editing by Reiner Simanjuntak