Sound Oil acquires interests in Bangkanai, Citarum PSCs
Monday, June 26 2006 - 01:20 PM WIB
?The transaction is subject to the approval of Sound Oil shareholders at an extraordinary general meeting to be held on 12 July 2006,? Sound Oil said in a statament on Monday.
The Bangkanai block, operated by Elnusa Bangkanai which owns 51 percent of the block, includes the Kerendan gas field where hydrocarbon resources were discovered in 1982. Mitra recently signed an agreement to sell part of its interest to PT Medco Energi Internasional. This sale process is still in progress. Once the sale is completed, Mitra will have 34 percent and Medco 15 percent.
Meanwhile, the Citarum block belongs to PT Bumi Parahyangan Ranhill Energia Citarum (BPREC) who got the contract on the block on October 7, 2005. BPREC is owned by Malaysian firm Ranhill Energy (60 percent and operator), Bumi Parahyangan Energi (20 percent) and Mitra (20 percent). No wells have been drilled on the block.
Sound Oil is also proposing to raise approximately ?10.7 million (net of expenses) through the placing. The net proceeds of the placing will be used principally to fund the development and exploration programs at Bangkanai and Citarum during the remainder of 2006 and 2007. It is expected that during this period four development wells (including two re-entry wells) and two exploration wells will be completed at Bangkanai and one exploration well will be completed at Citarum.
Sound Oil expects to commence production at Bangkanai in 2008 and to fund further exploration and development work after 2007 at Citarum.
?This is a very good deal for Sound. Within a few months we will have started drilling the first of four high impact exploration wells on our licences in Java and Kalimantan. In addition we shall be developing the Kerendan gas field in Kalimantan which we expect to give us a 20 year cash flow starting 2008,? company Chairmand and Chief Executive Officer Gerry Orbell said. (Robert)