Malaysia's Sona may buy Indonesian oilfield

Malaysia?s Sona Petroleum Bhd has identified a new oil field asset in Indonesia to buy after failing to clinch a deal in September.

Sources claim that Sona Petroleum is looking to buy a 100% stake in a Sumatra oilfield which is producing 1,500 barrels of oil per day. The oilfield is also said to have the capability of ramping up production to 4,000 barrels a day, according to Malaysian daily The Star.

Sona Petroleum is currently conducting a due diligence on the assets and if it is favorable expects to conclude the deal by early next year. Sona Petroleum has been actively scouring for oilfields. It had reviewed one in Australia, but had since abandoned the idea.

Back in September, there was wide speculation that Sona was looking to take up a stake in Singapore-listed RH Petrogas Ltd, an O&G company controlled by Sarawak tycoon Tan Sri Tiong Hiew King. However that deal didn?t come through.

Should the Sumatra deal go though, it would be Sona Petroleum?s first qualified asset (QA).

The price tag for the acquisition that is being bandied about is US$135 million (RM 418.5mil). Sona Petroleum is the third special purpose acquisition company (SPAC) to be listed on Bursa.

Sona?s stated plans are to acquire O&G assets that are already producing and whose cash flows would enable it to fund future acquisitions. Sona had raised RM550mil from its (IPO), with 90 percent of the proceeds being put into a trust.

Industry players reckon that securing a QA is increasingly becoming difficult. Not only is there an increase in the number of buyers, not the least being the Malaysian-listed SPACs themselves, but the weakening ringgit is also working against the Malaysian SPACs, the players say. (*)