Quest in talks with potential partners to fund Ranau block
Thursday, July 31 2014 - 05:27 AM WIB
ASX-listed Quest Petroleum NL said it has been engaged in discussions with a group of investors to potentially bringing a joint venture partner in to fund the continued work program, including a drilling program, at the Ranau PSC, in South Sumatra.
?Discussions with various parties are ongoing,? the company said in a statement Thursday.
Taking into account the company?s own treasury position and the expenditure commitments under the approved work program with the Indonesian upstream oil and gas authority SKKMigas, and set against the external difficulties , both regulatory and political, that have arisen in Indonesia over the past 18 months, Quest said it was prudent to review joint venture proposals and has advanced these discussions throughout the quarter.
?While a decision point has not yet been reached, there would be some key benefits to shareholders of bringing in a partner to fund the exploration program which would potentially see significant expenditure on the ground, including the completion of an expanded seismic program and the expected commencement of drilling,? the company explained.
As previously reported Quest conducted a detailed geological and geophysical study of the Ranau block which, although indicating some structural highs and leads of interest, also recommended that further risk mitigation work be conducted including a petroleum systems study, a reservoir study, well failure analysis and full GDE analysis. The aim of the further recommended studies would be to further define and de-risk current structures and mitigate charge and reservoir risks associated with the lead(s).
The Ranau PSC covers 2,191km? of the South Sumatra Basin. Sumatra is the 6th largest island in the world and has a well-established oil and gas industry. There is extensive infrastructure and multiple hydrocarbon markets located within close proximity to these projects and Sumatra.
Meanwhile, in parallel to the negotiations being conducted on the Ranau PSC, the company said it has been actively reviewing acquisition opportunities in different geographic regions that would provide Quest with an attractive, near term or producing asset (s). The company has been working with international technical consultants highly experienced in all aspects of the petroleum industry, with emphasis in reservoir appraisal and evaluation engineering and has reviewed multiple proposals to date.
?Quest has been very selective in its review to ensure the asset acquired has the potential to bring real near term value and cashflow to the company and its shareholders. As at 30 June 2014 Quest had identified several opportunities that met this criteria and warrant further due diligence and appraisal work,? it ended.
Editing by Reiner Simanjuntak