Interra Resources signs deal to acquire Benakat Barat oil field for $78.5m
Wednesday, September 4 2013 - 12:43 AM WIB
SGX-listed Interra Resources Ltd said that it has signed a sales and purchase agreement with a number of companies and individuals for a proposed acquisition of a controlling ownership in PT Benakat Barat Petroleum (BBP), which owns the Benakat Barat oil field in South Sumatra.
The company said in a statement received Tuesday that it will pay US$78.5 million for the acquisition. The agreement was signed by its subsidiary Goldwater Indonesia Inc on Tuesday.
?The company wishes to expand its current portfolio of oil and gas assets in Indonesia through the proposed acquisition. Upon completion, the company will acquire and gain control of BBP,? Interra said in the statement explaining its rationale for the acquisition.
The company further explained that the acquisition of BBP will increase the its existing reserves and enhance its current production of oil significantly. In the reserve report of the Benakat Barat field prepared by Gaffney, Cline & Associates dated May 2010, the ?proven plus probable? 2P reserves were stated as 19.9 million barrels.
In addition, Interra believes that the acquisition of the BBP is a strategic investment because not only is the Benakat Barat field adjacent to the Tanjung Miring Timur field owned by the company, it also produces oil from the same geological structures and formations as the Tanjung Miring Timur field. ?In this manner, the company will be able to leverage on the close proximity of the two fields to create operational synergies between them,? it said.
The transaction remains subject to approval by the authorities of both Indonesia and Singapore.
Editing by Reiner Simanjuntak