LCGP signs Langsa TAC agreement with Blue Sky Langsa
Friday, April 27 2012 - 02:55 AM WIB
Indonesia-listed property developer PT Laguna Cipta Griya (LCGP), which has recently changed its core business from property developer to oil and gas exploration and production, has signed a conditional co-operation agreement on Langsa technical assistance contract (Langsa TAC) with Blue Sky Langsa Ltd.
The company announced on Thursday that the agreement ruled a number of deals, which include that LCGP would become the operator of Langsa TAC, LCGP would pay a working capital, and would get a net profit share of 55 percent from Langsa TAC.
The conditional co-operation agreement will be presented in full document as a requirement for its second right issue scheduled before the end of the first half of this year.
The Langsa TAC area covers approximately 77 square kilometers within the Sumatra basin and contains two oil fields. Four wells have been completed in the Malacca Formation of which one well is active and three wells are idle. The fields are located in waters less than 325 feet deep.
The active well is currently producing at approximately 620 barrels per day and is gathered via a floating production storage and barge vessel operated by Mitsui Ocean Development & Engineering Co., Ltd (MODEC). An April 2010 third-party reserve study affirmed the net proven reserves were greater than 1.925 million barrels of oil.
LCGP President Director Alwi Bagir Mulachela said recently that his company would cooperate with US-based oil producer Saga Group in the oil and gas exploration and production activities.
Saga Group will become strategic partner by acquiring a 60 percent stake in LCGP, which will soon issue right shares to accommodate the acquisition, Alwi said, adding that the right issue was expected to raise about US$20 million.
The right issue will be held in April this year. After the right issue, Saga Group will become majority shareholder in LCGP. There will be also a change in the board of directors and commissioners following the right issue.
Alwi said that oil and gas exploration and production activities would be more promising than the current business. In the oil and gas sector, LCGP can earn revenues of about US$1 million a month or $12 million (about Rp 108 billion) a year. For a comparison, LCGP booked yearly total revenues of about Rp 30 billion.
Editing by Benget Besalicto Tnb.