Lion Energy has increased its interest in the South Block A PSC located in the North Sumatra Basin, Indonesia.
With the project operator Renco Elang Energy (REE), Lion Energy has executed its rights to default PT Prosys Oil & Gas International (POGI).
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POGI has 14% interest in this project, which will be taken up pro-rata by Lion Energy and REE in accordance with the Joint Operating Agreement (JOA) that includes South Block A PSC.
As a result of the default, Lion will hold 40.7% (previously 35%) and REE will hold a 59.3% interest (previously 51%).
Although POGI will not benefit from any potential success of the upcoming Amanah Timur-1 well, under the JOA it is responsible for any incurred / outstanding PSC liabilities, including its share of unpaid cash calls.
Lion’s incremental share of the Amanah Timur-1 drilling cost is estimated to be approximately $74,000.
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By GlobalDataLion Energy CEO Kim Morrison said: “We are pleased to be increasing our equity in South Block A PSC as Lion Energy considers this to be one of the most prospective exploration blocks in Sumatra.
“Underfunded partners are a fact of life in the present industry environment and we are glad to have this uncertainty resolved. We now enter the exciting drilling phase with a fully aligned partner and with the increased equity providing us additional leverage in this highly attractive block.”
Oil and gas company Lion Energy focuses on Indonesia with two conventional PSCs.
