Kinross International, a subsidiary of Bakrie Group, is in the process of finalizing the acquisition deal with Mitsubishi Corp on the latterâs divestment of 25% participating interest in the Kangean PSC, located offshore in the East Java Basin, as of late August 2019.  To finance the acquisition, Kinross has secured a USD 88,250,000 loan from two financial companies, Elektra Assets Ltd and Efa Ret Management Pte. Ltd, with Madison Pacific Trust Limited as guarantee agent, and affiliated company PT Energi Mega Persada (EMP) as guarantor. EMP will hold a shareholders meeting on 27 September 2019 to approve the corporate action.  The loan amount is broken down under two facilities: Facility A, amounting to USD 61,250,000, is subjected to 15% interest per year and Facility B, amounting to USD 27,000,000, has an interest rate of 18% per year.  Payments that need to be fulfilled under Facility A are as below, while Facility B is to be paid no later than the maturity date.    First payment of USD 20,000,000 to      be paid by 30 June 2019  Second payment of USD 20,000,000 to      be paid by 31 December 2019  Third payment of USD 10,000,000 to      be paid on 30 March 2019  Remaining balance to be paid no      later than 24 months effective from the utilization date   EMP will be the guarantor for the full amount of loan plus interest. The company will receive in return a guarantee fee of 1% per year from Kinrossâs total loan owed for six months. Kinross was chosen to be the entity to take over the 25% share from Mitsubishi due to EMP has restrictions taking up new loan with existing lenders.  The Kangean block generated 47% of the total revenue for the company in 1H 2019. Reportedly, gas lifting generated by the block for 1H 2019 amounted to approximately 133 MMcf/d or 67% of the targeted 200 MMcf/d.  Upon closing of the deal, EMP will remain as the operator of the PSC, holding 50% operatorship, with Japex holding a 25% participating interest and new partner Kinross holding the remaining 25%.  Background Information  The Kangean PSC was originally awarded in 1980 to ARCO. Energi Mega Persada took over operations in 2004.   South Saubi 1 was spudded in August 2016, using the âENSCO 8504â S/S. The well targeted Oligo-Miocene carbonates of the Kujung Formation. The top of the carbonates was intersected at around 3,300 m MD. The limestones were thinner than expected due to the unexpected occurrence of a volcaniclastic interval. The volcaniclastics could be a secondary reservoir in the area, however no hydrocarbon was found in South Saubi 1. The well was drilled to a TD of 4,460 m MD.  Source rock and migration have been indicated as likely reasons for the lack of success in this prospect. South Saubi was reported as a large oil prospect.  The block contains the Pagerungan Utara oil field, which commenced production in January 2011. The operator brought the Terang field (part of the Terang, Sirasun, Batur project) onstream in May 2012 through the FPU âBW Joko Toleâ. On 10 March 2019, the remaining two fields, Sirasun and Batur were also brought onstream, with the aim of achieving the targeted production rate of 200 MMcfg/d.
Mitsubishi is selling its 25% stake in the Kangean PSC (4,082 sq km) to Kinross Intl (Bakrie Grp). (Energi Mega Persada op, Japex ). 