Lion to invest in KRX Energy
Tuesday, June 26 2012 - 01:27 AM WIB
ASX-listed Lion Energy Limited said that it had executed an agreement with KRX Energy Pte Ltd, paving the way for Lion to provide funding for KRX?s acquisition and development of oil and gas interests in Southeast Asia.
The company said in a press statement on Monday that Lion and KRX had been in discussions for some time, with the result that both parties now had a clear and defined vision of the objectives of KRX. Ongoing developments during this process will see early identified opportunities mature in the very near future.
According to the press statement, KRX Energy Pte Ltd had reached agreement with existing joint venture parties to acquire a 35 percent working interest in a North Sumatra Production Sharing Contract (PSC), subject to regulatory approval.
The PSC covers an area of 2,105 square kilometer and has both conventional and unconventional potential. But it did not give any further details.
It also stated that it had taken the lead role in a joint study of unconventional gas/oil potential in western Indonesia together with significant and well-connected partners. Three applications have already been lodged.
It had also submitted a competitive bid on an offshore block in the South China Sea region. The Block contains high impact plays and attractive structures, with un-risked potential in the range of 0.5 to 2.7 billion barrels of oil or 1 to 7 TCF of natural gas. KRX awaits advice as to the outcome of the bid round.
Lion and KRX have signed an Interim Term Sheet which will be replaced as soon as reasonably practicable with a formal agreement (or agreements) with similar terms. Lion is committed to initial firm funding of A$1 million by way of subscriptions for shares at $0.05 per share to be provided progressively as needed, which on completion will give Lion a 30.77 percent interest in KRX.
Thereafter Lion has the right over 36 months to fund ongoing activities as it deems appropriate. KRX has no other significant assets or liabilities and currently has 45 million shares on issue.
Editing by Benget Besalicto Tnb.