Husky sells part of stake in E. Java block to CNOOC

Canadian firm Husky Energy announced Thursday that an agreement has been reached with Chinese firm CNOOC Ltd. to jointly develop the Madura BD gas and natural gas liquids field located offshore East Java. The agreement covers the development and further exploration of the Madura Straits PSC.

Under this transaction, CNOOC Ltd. will pay Husky U.S. $125 million to acquire a 50 percent equity interest in Husky Oil (Madura) Limited, which holds a 100 percent interest in the Madura Strait PSC.

The Madura Strait PSC is located approximately 40 kilometres north of East Java and covers 2,794 square kilometres of exploration acreage.

Ten wells have been drilled in this block since 1984, resulting in two discoveries, the Madura BD and MDA fields.

In 2007, Husky signed three gas sale and purchase agreements for the sale of 100 million cubic feet per day of natural gas from the Madura BD field to East Java buyers.(alex)