Stirling mulls Indonesia Camar oil field plans

Stirling mulls Indonesia Camar oil field plans

SYDNEY (Reuters): Oil and gas group Stirling Resources NL said yesterday funds from its recently announced rights issue would go to fund development of its Camar oil field interests in Indonesia.

"The main amount of money will be spent in Indonesia," managing director Dennis Morton told a media briefing.

Stirling has set a non-renounceable 1-for-1 rights issue at five cents a share with one free attaching option for every two new shares applied for.

The issue is targeted to raise A$10.2 million.

"We think it is a really good asset, but it does require quite a deal of additional expenditure to bring it into production," Morton said of the Camar field.

Total costs for planned development amounted to US$34 million, of which Stirling has to fund 16 percent.

The remaining 84 percent interest in the field is held by Canada-based Carmanah Resources Ltd.

The Camar project was underdeveloped and the current program would raise production rates from the current 1,000 barrels of oil per day (BOPD) to about 7,500 BOPD by the end of calendar 1998, Morton said.

Project finance had been planned in the original funding, but the Asia crisis spillover into Indonesia had quashed bank interest in Indonesian projects, irrespective of individual merits.

"Even though this was a tidy project, the banks elected to close their books on Indonesia," Morton said, adding that independent experts' evaluation of the offshore Java project had been positive.

Morton said the company had no problems with its Indonesian dealings with sales to Indonesian state oil company Pertamina currently on a normal 30 day credit cycle.

Stirling is 31.4 percent owned by Capital Energy N.L.

Stirling shares were a tenth of a cent lower at 5.1 cents on turnover of 183,900 shares by 1.55 p.m. (0355 GMT).