NuEnergy signs investment agreement with Century Energy Resources

By Romel S. Gurky

ASX-listed NuEnergy Gas Limited announced Friday the signing of a binding Investment Agreement with New Century Energy Resources Limited (NCE). The agreement recapitalizes the company to fund the development of its coal bed methane production sharing contracts (CBM PSCs) in Indonesia.

NCE has extensive experience in CBM exploration and production industry, including subsurface (geological, geophysical & reservoir), well drilling, completion and production techniques that can significantly enhance the productivity of CBM wells, NuEnergy said in a statement.

Key terms of the agreement are as follows:
? Within three business days NCE will pay a deposit of $200,000 to obtain exclusivity and commence due diligence for 30 days;
? Subject to successful completion of the due diligence by NCE, within three business days, NCE will subscribe for circa 83 million shares at 3 cents per share to raise $2.5 million (share placement?) representing 19.9 percent of the expanded share capital;
? Subsequent to the share placement, Graeme Robertson will resign as Non-Executive Chairman and remain as a non-executive director of NuEnergy. NCE will appoint three (3) directors to replace the remaining three directors of the company; and
? Subject to completion of the share placement, NCE shall (A) subscribe for shares via a share placement and/or (B) fully participate in and underwrite a rights issue in respect of shares in NuEnergy, for a total minimum commitment of A$10,000,000, to be completed by 31 December 2014 at a minimum price of A$0.03/share subject to shareholder and regulatory approval (where necessary).

As part of the recapitalization of NuEnergy the company said it intends to solely focus on its three Indonesian PSCs. NuEnergy?s core PSCs in South Sumatra will be the primary focus with the company aiming to drill further pilot wells at its Muara Enim CBM PSC and commence drilling at the Muara Enim II PSC, including a focus on the western area.

The secondary focus in Indonesia will be completing a farm out transaction for the Rengat CBM PSC in Riau focusing on drilling wells that intersect the identified 15 meter coal seam revealed after extensive geological and geophysical work completed in 2013.

NuEnergy announced in April that a delay of its proposed 49.9 percent farm-out of its interest in Rengat CBM PSC to an unidentified Asian investor. The company expected to complete the farm-out transaction in the fourth quarter of 2014. NUEnergy has 100 percent interest in the Rengat CBM PSC.

Editing by Reiner Simanjuntak