Ramba Energy signs deal to acquire stake at Jambi oil block

Singapore Exchange-listed firm Ramba Energy Limited announced on Wednesday that it has on May 10, 2010 signed a conditional sales and purchase agreement with Eurorich Group Ltd to acquire 25 equity interest in Elnusa Tristar Ramba Limited (ETRL) for US$20 million, comprising US$1.2 million cash and $18.8 million earn-out.

ETRL owns a 60% working interest in Ramba technical assistance contract (TAC) block in Jambi, South Sumatra. Talisman (Sumatra) Ltd, a unit of Canadian oil, gas firm Talisman Energy has the remaining 40% working interest as the non-operating partner in the TAC.

ETRL is incorporated in the British Virgin Islands on 3 July 2007 and is presently owned by Ray Elite Limited and PT Sugih Energy Tbk with each owns 37.5% shares with the 25% balance owned by Eurorich.

ETRL took over the operatorship of the Ramba Fields from ConocoPhillips Indonesia Holdings Limited on 21 September 2007. The current expiry date of the TAC is 15 October 2010.

Negotiations are currently underway with state oil and gas company Pertamina as the block?s owner to extend the term for a further period of not less than 10 years under a new contractual framework known as the ?KSO Contract?. ?As at the date of the signing of the Conditional Agreement, there is no certainty as to when the negotiations with Pertamina will be completed and whether such extension will be granted by Pertamina,? the Company said.

Under the earn-out deal, Eurorich will be entitled to an earn-out payment in the amount of $18.8 million if ETRL is successful in procuring the extension of the TAC for a further term of not less than 10 years under a KSO Contract by 31 December 2011.

The Ramba block covers a total area of approximately 481 square kilometers. The block already has a well developed infrastructure and a full suite of production equipment in place available for oil exploration and production.

In 2009, the TAC produced an average 3,800 barrels of oil per day, the Company said. (alex)