Kulim lowers acquisition value of CSE amid oil drop
Thursday, February 11 2016 - 01:07 AM WIB
Kulim Energy Nusantara Sdn Bhd, a subsidiary of Malaysia?s oil palm plantation group Kulim Bhd, had on February 7 reached a supplemental agreement with upstream oil and gas firm PT Citra Sarana Energi (CSE) to significantly reduce the acquisition value of shares in the latter company amid the current oil price drop.
Kulim said in a statement Wednesday that the total consideration for the proposed acquisition of 60 percent shares in CSE has now been set at US$80 million, down from $133.55 million agreed late in 2014.
The company added that the cash consideration includes $15 million in working capital for CSE to help finance the development of its oil and gas field in South West Bukit Barisan Block (SWBB PSC), Central Sumatera.
The statement added that Kulin has an option to increase its stake in CSE by another 5 percent for $4.67 million within one year period.
As has been previously reported, Kulin plans to acquire the CSE shares from PT Wisesa Inspirasi Sumatra (WIS) and PT Inti Energi Sejahtera (IES).
The Government of Indonesia awarded the SWBB PSC to CSE subsidiaries PT Radiant Bukit Barisan E&P (RBB) and SKR International Ltd on November 13, 2008 for a period of 30 years. CSE owns 99.9 percent stake in RBB, an upstream oil and gas firm, and 100 percent shares in SKR, a services and trading company.
Under the SWBB PSC, RBB and SKR have participating interests of 51 percent and 49 percent, respectively in the SWBB block whereby RBB has been appointed as the operator.
The SWBB block is located onshore in West Sumatera province and situated within the Ombilin Basin (part of elongated trend of Central Sumatera basin). The original exploration area of SWBB PSC was 3,895 square (sq) kilometers (km). Currently, the exploration area has been reduced to 779 sq km mainly due to compulsory relinquishment exploration area under the terms and conditions of the SWBB PSC.
Editing by Reiner Simanjuntak