Giken Sakata seen closer to complete acquisition of Cepu Sakti Energy
Monday, June 30 2014 - 04:58 AM WIB
SGX-listed manufacturing firm Giken Sakata (S) Limited announced on Monday it has been informed that a November 2010 master of agreement between PT Pertamina EP and PT Sarana Patra Jateng has been extended until November 2020, a condition set by the company to complete cash payment for the acquisition of an Indonesian oil and gas asset.
?The board wishes to announce that the target group has informed the company that the Production of Oil from Old Wells Agreement between PT Pertamina EP and PT Sarana Patra Jateng dated 3 November 2010 has been extended until 3 November 2020,? Giken said in a statement.
?The parties to the Agreement are in discussions to vary the terms of the Agreement relating to the timing of the Second Tranche payment as it is not intended that the Second Tranche payment will be made within the timing stipulated in the Agreement,? it added.
Giken announced signed on April 11 of this year an MoU with Java Petral Energy Pte Ltd (JPEL) for the proposed acquisition of 51 percent shares of Cepu Sakti Energy Pte Ltd (CSE), which owns 95 percent of PT Cepu Sakti Energy.
PT Cepu holds the exclusive rights to cooperate in conducting operations for extracting oil from two oilfields in Tungkul and Trumbul fields in Blora, Central Java, and the Dandangilo, Wonocolo and Ngrayong fields in Bojonegoro, East Java, Indonesia, with a total of 148 oil wells pursuant to certain cooperation agreements. As at the date of this announcement, the oil fields are producing a minimum of 300 barrels of crude oil per day.
Giken will acquire the 51 percent shares in CSE at a value of S$48 million, about S$25.2 million to be paid in cash while the remainder in the form of Giken shares to be issued to JPEL. The cash payment was to be made in two tranche.
Giken has said that the second tranche payment of S$10.2 million will only be made upon evidence beig provided to the company?s satisfaction of the renewal of the November 2010 master of agreement between Pertamina EP and Sarana Patra Jateng for an additional 5-year term from the expiry date.
Pertamina EP is an Indonesian national oil major who holds the rights to operate and produce oil in the relevant oil fields.
Sarana Patra Jateng has been granted a right from Pertamina EP to operate the old wells at Tungkul and Trumbul fields in Blora, Central Java.
Editing by Reiner Simanjuntak