SKK Migas approves Lemang farm-in transaction

By Ruli Setiawan

SGX-listed Ramba Energy Limited and Mandala Lemang Singapore Pte Ltd announced on Wednesday that they have received SKK Migas approval for the transfer of a 35 percent interest in the Lemang Production Sharing Contract from PT Hexindo Gemilang Jaya to Mandala and the transaction is now deemed to be completed.

Lemang has a relatively low operating and capital cost structure which is favorably positioned for development, even in the current oil price environment, and both parties remain excited about progressing the project through 2016 and bringing it into production. Through a secondment agreement, Mandala's team will bring its complementary technical experience and capabilities to work actively alongside the Ramba team. The parties look forward to building on the strength of this partnership to maximize the potential of the project.

Mandala is a South East Asia-focused oil and gas exploration and production company backed by leading global investment firm, KKR. Mandala is led by an executive management team of three highly experienced, technically based co-founders with over 75 years of combined experience in oil and gas operations, and who have spent the majority of their careers in South East Asia. KKR partnered with Mandala in early 2015 to bring complementary technical and financial capability to regional independent and national operators across the exploration, development and production spectrum in order to drive portfolio growth and maximize asset potential.

?Despite the current low oil price environment, we are excited to have reached completion and look forward to our long term partnership with Mandala and at the same time, taking advantage of the lower cost environment to reduce our development costs further. This is a further upside to the already low cost of production we expect from the Lemang block.? said David Soeryadjaya, CEO of Ramba.

?Mandala is very appreciative of the timely approval of the transfer by SKK Migas. We are excited to implement our complementary partnership with Ramba such that together we can initiate early oil production and then aggressively pursue the very significant upside in the Lemang PSC,? said Barry O?Donnell, CEO of Mandala.

Prior to the transaction, Hexindo, which is 80.4 percent indirectly owned by Ramba Energy, owned 51 percent of Lemang with the remaining 49 percent owned by Eastwin Global Investments Limited, a company incorporated in the British Virgin Islands. Concurrently with the farm-in agreement with Mandala, Hexindo signed agreement to acquire a 15 percent interest in Lemang from Eastwind. As a result of the transactions, Lemang is now 35 percent owned by Mandala, 31 percent by Hexindo, and 34 percent by Eastwin.

Editing by Johannes Simbolon