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.