Northcote acquires interest in TOE

By Romel S. Grky

AIM-listed Northcote Energy Ltd said that it has exercised its right to acquire a 3.75 percent working interest in the Tuba Obi East Technical Assistance Contract (TOE), which is located in the South Sumatran basin approximately 30km north-west of Jambi city in Jambi province.

The company said in a statement Wednesday that this is in line with Northcote?s Participation Agreement with Andalas Energy & Power Plc (Andalas), which is farming into a 30 percent interest in TOE

Northcote said that the acquisition is also line with the company?s strategy to create a diversified oil and gas company with investments across the oil and gas value chain.

It added that TOE is the entry point for Andalas into the attractive Indonesian gas and power sector and any future gas production from the concession may support either gas export with the project located close to a major export route, or gas-to-power being located in an area where a significant shortfall in power generation exists

Andalas will undertake a work program comprising technical studies and the drilling and testing of one well which would be put into production on success. Wells drilled historically have tested gas in the key South Sumatra hydrocarbon bearing formations, namely, the Air Benakat Formation (ABF) and the Talang Akar Formation (TAF), the statement explained.

Andalas? technical analysis indicates that this reservoir zone contains potentially substantial gas resources that can be proven via the drilling and flow testing of the proposed TOE-2 well. Northcote to fund its proportional share of the costs, estimated at a total gross amount of US$200,000, for which it is fully funded, the company said

?The presence of gas at TOE is proven and considering the solid infrastructure in the region, we believe this concession represents an excellent opportunity to generate value for Northcote?s shareholders. Andalas is planning to drill a new well in the near term, and subject to the results, this could signal the start of an exciting development campaign. Combined with our plans to drill two back to back wells at the producing Shoats Creek field in Louisiana and with the construction of our waste remediation facility in Mexico fully funded and underway, the next few months will not be short of high impact newsflow,? said Northcote Managing Director Randall Connally.

Editing by Reiner Simanjuntak