Sugih finalizes acquisition of 2 oil and gas blocks

PT Sugih Energy Tbk is conducting a due diligence for acquiring two oil and gas blocks and hoping that it can be finalized this month.

?After finalizing the due diligence, then we will continue with the acquisition. It could be finalized before the end of this year. The initial results from the due diligence have shown that the oil and gas blocks have a life cycle of 10 years,? said Andhika Anindyaguna, Director of PT Sugih Energy Tbk on Tuesday.

He said that the real capacity of the block would be known next month. The results of the due diligence will determine the acquisition price of the blocks. But based on its initial estimation, the two blocks, which are located in Sumatra, are respectively valued at US$50 million and US$100 million.

When the due diligence completed and the price determined, then the company will start seeking fund for the acquisition from foreign sources. The company hopes to finalize the acquisition as quick as possible so that the acquired companies can contribute to its revenue, as until now there has been none of its blocks already in production. All are still in the stage of exploration.

The blocks include Lemang Block, which was taken over by buying 100 percent share of Eastwin Global Investment Ltd from Roots Capital Asia Ltd at the price of US$ 230 million last week. It got the fund from rights issue, through which it got a total of Rp 2.43 trillion.

This year, the company?s income will only come from PT Resources Jaya Teknik Management Indonesia. This subsidiary was taken over by Sugih last month at the price of Rp 5.1 billion. PT Resources Jaya Teknik is an oil and gas drilling service company, which managed to reach a profit of Rp 140 billion last year.

If the company can finalize the acquisitions of the two blocks this year then it will help the company generates higher income this year. During the first quarter this year, its year-on-year net profit dropped by 138 percent to a minus Rp 3.96 billion. (*)