Jadestone Energy plc ("Jadestone"), an independent oil and gas production company focused on the Asia-Pacific region, is pleased to announce the acquisition of a 10% interest in the Lemang Production Sharing Contract ("PSC"). Through this transaction, Jadestone's interest (pre local government back-in rights) in the Lemang PSC will increase to 100%.
The 10% interest is being acquired through the execution of a Settlement and Transfer Agreement between Jadestone and PT Hexindo Gemilang Jaya ("Hexindo"). In return for the transfer of Hexindo's 10% stake, Jadestone will waive unpaid amounts relating to Hexindo's interest in the Lemang PSC and pay a consideration of $500,000 (inclusive of transfer taxes, which Jadestone will remit directly to the Indonesian government). The transaction is subject to the approval of the Indonesian government, the shareholders of Hexindo and the shareholders of Eneco Energy Limited, Hexindo's parent company.
The Lemang PSC contains the fully appraised Akatara gas field, the development of which will substitute coal for locally produced gas in power generation, as well as condensate sales and LPG for local residential and domestic use. Once onstream, the Akatara gas field will broaden Jadestone's production base, as well as increase the proportion of gas in the production mix, thereby reducing the Company's greenhouse gas emission intensity.
The field has been independently estimated to contain a 2C gross resource (pre local government back-in rights) of 63.74 bscf of natural gas, 2.45 mm bbls of condensate and 5.64 mm boe of LPG, equating to a combined 18.7 mm boe of resource. The acquisition of the Hexindo interest would add circa 1.9 mm boe of resource, or US$0.26/boe of 2C resource acquisition cost, based on the consideration paid. This compares to the $0.70/boe acquisition cost Jadestone paid for its original 90% interest in the project in 2020.
Paul Blakeley, President and CEO commented:
"We are pleased to announce this acquisition which adds resource to the Company at minimal cost and has the added benefit of removing a defaulting partner.
The Lemang PSC is a key organic growth project for Jadestone and will provide meaningful gas production to the local market; displacing coal-fired power generation. We continue to make significant progress on commercial terms, with negotiations over a fully termed gas sales agreement at an advanced stage, and I would like to thank the buyer and the Indonesian government for their continued constructive engagement. A final investment decision is still expected in H1 2022 with first gas also still on track for H1 2024."