MEO increases interest in S. Madura PSC to 90%

Australia-listed firm MEO Australia Limited announced that South Madura Exploration Company Ltd (SMEC), a wholly owned subsidiary of MEO, has acquired an additional 60% participating interest in the South Madura PSC, onshore Madura Island, from AED South Madura BV.

MEO said that the acquisition increased its participating interest in the South Madura PSC to 90 percent. MEO acquired a 30% participating interest in the PSC in June.

Consideration for the acquisition is US$0.3 million payable upon completion of the transaction and receipt of requisite governmental approvals.

The South Madura PSC covers an area of 1,586 km2 and expires on October, 13, 2013. PT Eksindo South Madura holds 10%. MEO considers the PSC to be prospective for oil.

Subject to completion of the transaction, MEO intends to apply to the regulator for a variation to the work program involving acquisition of seismic to advance one of several identified leads to a drillable prospect status.

In the event that MEO completes the transaction, obtains regulatory approval for a work program variation, acquires seismic and matures one of the identified leads to drillable status, a partner will be sought to fund a potential 2013 drilling campaign.

This acquisition is consistent with MEO?s strategy of expanding its portfolio by securing a high initial participating interest at a low entry cost in areas with proven hydrocarbon systems, where the company considers it can add technical value before farming down to larger industry participants who are seeking attractive, drill ready, growth opportunities. (romel)