Sydney-based AWE Ltd. has finally received approval from the Indonesian government for the sale of its 42.5% interest in the Lengo gas project in the Bulu production-sharing contract in the East Java Sea.
The sale was first announced in May last year and is back-dated to Apr. 1, 2016. The buyer is Singapore-based upstream entity HyOil Pte Ltd. and the price will range up to $27.5 million (Aus.) beginning with an initial up-front payment to AWE of $15 million.
This will be followed by an additional two-part cash payment following execution of a gas sales agreement for Lengo. It comprises $5 million (Aus.) if the contract gas price is at, or exceeds, $5.5/MMbtu (US) along with a further $7.5 million (Aus.) if the contract gas price is at, or exceeds, $7.65/MMbtu (US).
Front-end engineering and design work for Lengo began back in 2015 with the aim of establishing 70-MMcfd production with the facilities potentially becoming a gas aggregation hub for other fields in the East Java Sea.
The Lengo project is operated by KrisEnergy Ltd. with 42.5%. Other interest holders besides HyOil are PT Satria Energindo with 10% and PT Satria Wijayakusuma with 5%.
AWE’s reason for selling its Lengo interest is to concentrate particularly on the Waitsia gas project onshore north Perth basin in Western Australia and its 50% interest in the 100 million-bbl Ande Ande Lumut oil project in Indonesia’s northwest Natuna Sea.
