By OGJ editors
HOUSTON, Apr. 3 -- PetroWorld Corp. and NuCoastal (Thailand) Ltd. have signed a letter of intent to merge their assets in Thailand.
PetroWorld is to acquire NuCoastal's outstanding shares in exchange for new PetroWorld shares in a deal estimated in value at $56.75 million.
PetroWorld holds a 50% equity interest in the G5/43 Block in the Gulf of Thailand, where three successful appraisal wells were drilled last year in Bua Ban oil field. NuCoastal operates and holds the remaining 50% in the block.
NuCoastal assets include 8.925% interests in the EU1 and E5N Blocks, which contain Phu Horm gas field, currently under development and expected to start production later this year; a 25.5% interest each in the L15/43 and L27/43 exploration blocks; and a 15.3% interest in the L13/48 exploration block east of the Phu Horm.
Phu Horm has about 1 tcf of proved, probable, and possible gas reserves. A 15-year gas sales agreement with the Petroleum Authority of Thailand commits 500 bcf of gas for delivery to the Nam Phong Power Plant, expected to begin operation in the fourth quarter of 2006.
The L15/43 Block is believed to contain the southern extension to Phu Horm field. Based on mapping data, NuCoastal said it and the EU1 and E5N Blocks could add several trillion cubic feet of gas reserves.
The L27/43 Block has a number of identified exploration and appraisal targets mapped by 2D seismic data. A well is planned later this year to appraise an existing gas discovery.
After the merger, PetroWorld would hold 100% of the G5/43 Block. Three wells drilled by NuCoastal and PetroWorld in August 2005 in Bua Ban field confirmed
oil reserves of 8 million -17 million bbl. An engineering development feasibility study is under way and due for completion in April.
Development feasibility work is also being undertaken on the smaller Songkhla field, which was discovered in 1989 and tested 1,500 b/d of oil. Production applications are being prepared for the Songkhla and Bua Ban areas. Plans for a 3D seismic program have been delayed for acquisition of a seismic vessel. The seismic program is expected to begin over Bua Ban field and a large portion of the western part of the Songkhla basin in the third quarter of 2006.
PetroWorld Chairman Al Whitehead and Chief Executive Frank Inouye will continue in their roles.