Release: PrabuEnergy declared winning bidder of the Ranau PSC
Thursday, September 22 2011 - 03:31 AM WIB
Completion of Merric Capital Acquisiton
On 9 June 2011 the Company announced it had executed an agreement to acquire 100% of Merric Capital Pty Ltd (Merric), which holds an 80% interest in the onshore Ranau gas exploration prospect in South Sumatra, Indonesia through PrabuEnergy. Following shareholder approval of the transaction on 8 August 2011, completion of the acquisition was subject to signing of the Ranau PSC by the Indonesian Government and completion by Merric of a rights issue to raise approximately $1,000,000. With the formal issue of the Ranau PSC now confirmed by the Indonesian authorities to occur shortly, Quest expects to complete the acquisition of Merric Capital within a few weeks following formal award of the PSC and completion of the Merric rights issue.
Comomencement of Ranau PSC Work Programs
The award of 100% interest and operatorship of the approximately 2,123km2 Ranau PSC to PrabuEnergy will allow Quest to expedite an exploration program including 2D seismic and wells post settlement of the Merric acquisition. In the event of exploration success, Quest will produce gas and/or oil and share revenue under the terms of the PSC. Quest is excited about the exploration and production potential of the Ranau PSC as it contains extensions of proven sub-Basins of the prolific onshore South Sumatra Basin. These sub-basins contain several large scale structures within the Ranau PSC which will be further defined into drillable prospects by the initial 2D seismic work program.
Experienced Technical Team
Merric has been led by Saxon Palmer, a experienced oil and gas executive who until 2007 had been Exploration Manager Australia/Asia and Portfolio Manager for BHP Billiton.
Merric, through PrabuEnergy, has developed key relationships with prominent oil and gas professionals in Indonesia, in particular with Mr Mochamad Thamrin, a leading industry professional with a deep knowledge of the petroleum geology of South Sumatra. These relationships are important to implementing our understanding of the petroleum geology of South Sumatra, acquiring assets and executing work programs in the area. Key personnel of Merric and PrabuEnergy will be joining the Company?s management team as part of the transaction.
Background on the oil and gas industry in Indonesia and Sumatra
Sumatra is the 6th largest island in the world and has had a substantial oil and gas industry since 1885 when Indonesia?s first successful oil well was drilled in North Sumatra, creating the Royal Dutch Shell group. Since then more than 400 oil and/or gas fields have been discovered containing more than 45 billion barrels of oil equivalent.
Today Sumatra produces oil for domestic and international markets and gas for domestic markets in Sumatra and West Java, and to international markets in Singapore, via pipeline, and North Asia, via LNG export.
The North and Central Sumatran petroleum basins are dominated by large international petroleum companies such as Chevron, Pertamina, CNOOC, ConocoPhilips and ExxonMobil. In South Sumatra the industry is dominated by Pertamina (Indonesian?s national oil company) and smaller local companies. The value creating opportunity for Quest is that PrabuEnergy believes it can bring industry leading ideas and technologies to explore for and produce oil and gas in the established, long term, production environment of South Sumatra. (end of release)