Strategic investor offered a farm-in to Rengat PSC

By Romel S. Gurky

ASX-listed NuEnergy Gas Ltd announced Thursday that it has issued a written offer to a potential strategic investor. The offer includes an investment in the company and a farm-in to the Rengat CBM PSC located in Riau.

NuEnergy did not disclose the name of the investor, but said that it is a large Asian diversified multinational group. The group has a turnover in excess of US$5 billion. Both parties have been in formal due diligence for the past month.

Under the terms of the proposal the farm-in party would provide cash and a carried interest to NuEnergy. It is intended the party would fund the work program of Rengat PSC. From the cash NuEnergy would fund the ongoing work program for the Muara Enim PSC and Muara Enim II PSC located in South Sumatra.

Negotiations between NuEnergy and the party are at an advanced stage. Both parties are working to reach agreement this year, the company said.

NuEnergy is the operator of the Rengat CBM PSC, covering a concession area of 2,995 square kilometers.

PT Indon CBM, a wholly-owned subsidiary of NuEnergy, has recently completed a Migas joint study, the results of which have defined an area of 2,995 square kilometers encompassing coal seams averaging 3-5 meters thick and from 450 to 1550 meters in depth.

Preliminary studies by IndonCBM have projected gas content in the targeted areas to be approximately 118-160 scf/ton. Studies of the concession area have strongly suggested coal properties are most suitable for coal bed methane exploitation and commercial production and rank favorably with comparable global CBM producing basins. Existing oil field and gas pipeline offtake infrastructure is in place.

Editing by Reiner Simanjuntak