Jadestone to acquire operated 90% interest in Lemang PSC, onshore Indonesia

Jadestone Energy Inc. has agreed to acquire an operated 90% interest in the Lemang production sharing contract, onshore Indonesia, from Mandala Energy Lemang Pte Ltd. for $12 million and certain subsequent contingent payments.

The Lemang PSC onshore Sumatra, includes Akatara gas field, which was previously developed as an oil producing asset, but has a best estimate gross undeveloped wet gas in place of 115 billion standard cu ft (bscf) which, at 90% interest, equates to unrisked 2C resources of 55.2 bscf sales gas, 2.2 million bbl of condensate, and 5.8 MMboe of liquid petroleum gas.

The asset has been de-risked with 11 wells drilled, plus 3 years of oil production history, up until the field ceased production in December 2019, after reaching its economic limit for oil production.

The remaining 10% working interest is held by PT Hexindo Gemilang Jaya. The local government has a back-in right for up to a 10% working interest, at the time of development sanction.  If exercised, this would result in an 81% interest, net to Jadestone.

Further consideration of $5 million is payable to the seller upon first gas, in addition to further contingent payments of up to $26.7 million, which may be triggered in the event that certain upside outcomes occur.

Completion is conditional upon customary governmental consents to the assignment of the interest to a wholly owned affiliate of Jadestone, the appointment of such affiliate as operator under the joint operating agreement, as well as other consents under the JOA, as required, all on or before June 26, 2021. Closing is expected in first-quarter 2021.