Continental Energy Corp., Vancouver, BC, announced plans Tuesday to buy a 70% stake in British Virgin Islands-based GAT Bangkudulis Petroleum Co. Ltd. (GATB) and its Bangkudulis oil field development project in East Kalimantan, Indonesia. The seller is Vancouver-based Dimensions West Energy Inc., which acquired its 70% shareholding of GATB in 1998.
Terms of the deal call for Continental to pay Dimensions West Energy a nonrefundable $15,000 (US) cash deposit and allow Dimensions West Energy to recover its entire $3.6 million (US) investment from actual crude oil production proceeds derived from Bangkudulis field when they become available.
Continental also will assume all of the seller's funding responsibility�$4.4 million (US)�with regard to GATB, its technical assistance contract with Indonesian state oil company Pertamina, and the field development project, effective June 1, 2000. Continental also will provide Dimensions West a 10% net profit interest in Continental's 70% share of Bangkudulis field production profits for the life of the field.
Bangkudulis field lies mostly onshore Bangkudulis Island in the Sesayap River estuary and Tarakan basin of East Kalimantan. Continental Energy said a report by a third-party engineering company estimates that the Bangkudulis field contains proved, developed nonproducing oil reserves of 2.8 million bbl plus probable reserves of 8.5 million bbl.
An existing production well on the Bangkudulis field is shut in. During a 4-year period ending in 1989, that well flowed 540,000 bbl of sweet 41-degree crude. To fully develop the field, Continental Energy said, it could drill up to 18 new production wells. Continental Energy's estimate of the field development cost is $28 million (US).
Dimension West Energy has already invested $3.6 million (US) in Bangkudulis field, which it used to construct four drillsites, access roads, and a 7-in. pipeline and to install production and logistics infrastructure.
The Bangkudulis technical assistance contract covers an area of 18.6 sq km over Bangkudulis field, an oil and gas field discovered in 1980 by ARCO. GATB owns a 100% interest in the TAC and the underlying field development project, and it acts as field development operator.