Ramba signs MoU to farm-out 25% interest in Lemang PSC

By Ruli Setiawan

SGX-listed Ramba Energy Limited said Monday it had on September 6, 2015 entered into a memorandum of understanding with a strategic investor (farm-in partner) to farm-out a 25 percent working interest in the Lemang production sharing contract from the company?s 80.4 percent-owned Indonesian subsidiary, PT Hexindo Gemilang Jaya.

Ramba said in a statement that due to confidentiality obligations imposed by the farm-in partner pursuant to the MoU, we will make a separate announcement to disclose the identity of the farm-in partner upon execution of the definitive agreements.

The company and farm-in partner have entered into the MoU with the objective to sign the definitive agreements on or before September 25, 2015.

Ramba said the proposed transaction is subject to confirmatory due diligence to be undertaken by the farm-in partner. ?From the date of the MoU until the date of the definitive agreements, the parties will finalize the terms of the farm-out and other agreements which will document the terms of the proposed transaction, the amendments to the joint operating agreement and other enabling documentation such as the secondment agreement,? Ramba explained.

Ramba said that under the terms of the MoU, the aggregate consideration for the proposed transaction is up to US$128,250,000, consisting of an upfront cash payment of approximately $18,750,000, payable on completion of the proposed transaction following satisfaction of certain regulatory and other conditions, with the remaining cash payments payable upon achieving certain agreed milestones.

Ramba, through its Indonesian subsidiary, PT Hexindo Gemilang Jaya, holds a 51 percent working interest in the Lemang PSC. Sugih Energy has 49 percent participating interest in Lemang through its subsidiary Eastwin Global Investment Ltd. The Lemang block currently covers a working contract area of 2,541.04 km2.

This portal reported last month that Ramba has received approval of the first Plan of Development (POD) for the Akatara Field, located in the Lemang block, in Jambi, marking one of the final steps for the group in commencing oil and gas production from the Lemang block.

Ramba said last month that development of the Akatara Field and commercialization of the Lemang block will commence immediately with a view to commence production within six months at an initial rate of 1,635 barrels of oil per day (bopd) and 4.10 million standard cubic feet of natural gas per day (mmscfd) in late 2017.

Editing by Reiner Simanjuntak