Cue Energy and Wirabuana sign exploration joint venture
Cue Energy and Wirabuana sign exploration joint venture
WELLINGTON (Reuter): Cue Energy Resources yesterday said it had negotiated a joint venture with the Wirabuana Group of Jakarta, Indonesia, which would undertake oil and gas exploration work in South Sumatra.
Cue said in a statement that the joint venture had submitted details of the venture to Pertamina, the Indonesian State Oil Company, in relation to the signing of a Production Sharing Contract (PSC) over the Tanjung Jabung area in South Sumatra.
"The Wirabuana Group late last year emerged as the winner of the bid process for the block with a minimum exploration work program of US$15.2 million encompassing 800 km of seismic and three exploration wells in the first three years of the contract," Cue said.
"In the joint venture with the Wirabuana Group, Cue Energy will initially take on 40 percent of this commitment."
Cue said the Tanjung Jabung Block covered an area of 8,350 square kilometers of the northern margin of the prolific South Sumatra Basin where approximately 140 oil and gas discoveries had been made with recoverable oil reserves of two billion barrels and gas reserves of around seven trillion cubic feet.
It was expected that the formal granting of the Tanjung Jabung PSC to the Wirabuana Group and Cue Energy would take place in April, 1997.
"The PSC will be jointly operated with Cue Energy providing technical and commercial management and the Wirabuana Group contributing staff and logistical support," Cue said.
"Upon formal granting of the PSC Cue Energy will pay to the Wirabuana Group a cash consideration which is yet to be finalized as well as the US$600,000 signature bonus to Pertamina."
Subsequent expenses would be effectively split 60 percent Wirabuana Group:40 percent Cue Energy.
Cue said to fund the acquisition and the exploration commitments, ANZ Securities had underwritten a placement of 40 million ordinary fully paid Cue shares at A$0.20 raising A$8.0 million for Cue Energy.
"The National Provident Fund of Papua New Guinea has agreed to take 19 percent of this placement to maintain their current relative shareholding in the company. The placement is subject to shareholder approval and granting of the PSC," Cue said.