Lion Energy signs deal to acquire 16.5% interest in Indonesian PSC

Oil and gas exploration firm Lion Energy has signed an agreement to acquire Gulf Petroleum Investment Company’s (GPI) 16.5% interest in the Seram Non-Bula (SNB) production sharing contract (PSC), located on Seram Island, Indonesia.

The proposed acquisition is valued at a total consideration of $44m and will increase Lion’s stake in SNB to 19%. The asset is located adjacent to Lion’s 100% interest in the recently awarded East Seram PSC.

SNB comprises the Lofin gas/condensate discovery and the Oseil Oil Field. Lofin is estimated to hold 2C contingent resources of 2.02tcf of gas and 18.2mmbbl of condensate while Oseil contains remaining reserves of 4.1mmbbl.

Under the terms of the agreement, Lion Energy will make an upfront payment of $32m and pay the remainder once certain conditions are fulfilled.

The contingent payments to be made by the company include $7.2m within four months from receipt of approval of the full field plan of development (POD) for the Lofin field and a further $4.8m upon commencement of gas production from the approved POD.

Lion Energy executive chairman Tom Soulsby said: “This opportunity is a game changer for Lion and, subject to funding and completion, will springboard the company into a significant regional gas player on the basis of reserves once commercialisation milestones are satisfied on the massive Lofin gas and condensate discovery.”

The company is exploring various funding options to finance the acquisition.

The completion of the transaction is subject to receipt of approval of regulator and SNB joint-venture partners, along with the satisfaction of other conditions.

CITIC Seram Energy operates the SNB PSC with a 41% interest. Petro Indo Mandiri (30%) and GHJ Seram Indonesia (10%) hold the remaining stake.