Serica Energy: Status of review of Indonesia assets
Friday, July 1 2011 - 01:00 AM WIB
"Last November we announced a review of our holdings in Indonesia. The outcome of this review was flagged to shareholders at the time of the release of our full year results. After evaluating proposals from a number of companies we have decided to accept an offer from Pace Petroleum, a company backed by GEMS, under which Pace will be acquiring Serica's subsidiary group of companies through which we hold our Indonesian business.
The funding for this transaction is to be provided by a new resources fund being finalised by GEMS which is an Asian Private Equity Group based in Hong Kong.
We have received written confirmation from GEMS that they expect completion of a fundraising in July and the transaction to complete expeditiously thereafter.
It is, of course, a possibility that GEMS will not achieve this, in which case we shall be continuing discussions with other parties who have made proposals but we will also be looking at the possibility of retaining our Kambuna production which has been performing well and benefitting from recent high oil prices.
The sale by Serica and the purchase by Pace, described in a fully termed and initialled SPA but subject to final approvals by both GEMS and Serica's Board, comprises the companies which hold our 25% interest in the Kambuna field, our 30% interest in the Kutai exploration block offshore East Kalimantan and our 100% interest in the East Seruway block offshore North Sumatra.
The cash consideration, as at 1st January this year, is $US33 million adjusted for working capital plus a deferred payment of $US2 million, contingent on the outcome of the Kambuna #5 well planned for drilling later this year. The sale excludes the value of certain oilfield equipment, which will be retained by Serica, and the value of VAT tax receipts in respect of past costs which will pass through to Serica as they are received."(end of edited statement)