document: Bass Oil announced on 13 November 2018 the signing of a Heads of Agreement with Azipac for the acquisition of 100% interest and operatorship in the North Madura PSC, located in shallow water East Java Basin. The deal is contingent to the signing of a detailed sale and purchase agreement and reception of the necessary regulatory approvals.  The PSC has a remaining commitment of one exploration well plus two contingent wells in case of success. The Reog prospect has been identified as the top drilling candidate. According to Azipac, the prospect, located in the western part of the PSC, could contain up to 1.3 Tcfg within three stacked carbonate buildups of the Kujung Formation. The prospect is located 3 km east of the Ujung Pangkah field (Pangkah PSC) which has produced 9,000 bo/d and 44 MMcfg/d in 2017.  Drilling of the Reog prospect is expected in 2019. Upon completion of the deal, Bass will likely seek a farm-in partner in the PSC to offset exploration risk and share drilling cost. Earlier in 2018, Azipac estimated a cost of approximately USD 8 million for the well.  The seismic commitment in the block was fulfilled with a 400 sq km 3D seismic survey acquired in the block in late 2017, using the âPGS Apolloâ S/V as part of a multi-client survey project that also covered Petronas Carigaliâs North Madura II and Ketapang PSCs. The purpose of this survey was to assess the potential of the deeper reservoir. According to AziPac, the under-explored Ngimbang clastics could provide further upside in the area.    The exploration period for the North Madura PSC is due to expire in May 2020 following a four-year extension effective on 18 May 2016.  Background Information    The North Madura block was offered on 30 November 2009 as part of the Second Petroleum Bidding Round 2009 under the direct offer mechanism. The block was awarded to AWE (50%, operator) and Black Platinum Energy (50%) on 18 May 2010. Mitra Energy then farmed-in and acquired 25% interest from Black Platinum on 9 June 2011. Firm commitments for the first three years of exploration include G&G studies (USD 0.4 million), and drilling of one exploration well (USD 8 million). Signature bonus for the block was USD 1 million.  The block covers an area of approximately 1,850 sq km following partial relinquishment in 2016 and comprises two separate areas in shelf water. It is adjacent to Pertaminaâs West Madura Offshore PSC, which includes Poleng and KE 6 oil fields and KE 5 gas field and to Petronas Carigaliâs Ketapang PSC, which includes the Bukit Tua oil and gas field. Several sub-blocks were previously covered by the Pangkah PSC, currently operated by Saka Energi.  AziPac initially entered the block in October 2015, acquiring a combined 50% interest from Mitra Energy (25%) and North Madura Energy Limited (25%), a wholly-owned subsidiary of Black Platinum Energy. In 2016, operator AWE divested its 50% interest to Azipac which became sole interest holder in the block. The company then commenced to seek a farm-in partner for the block.  The previous exploration activity in the block was a 350 km 2D seismic survey in September 2014. No wells have been drilled to date under the North Madura PSC. AWE was planning to drill wildcat Dyah 1 in late 2015, however the plan did not go through. Dyah is likely a carbonate prospect likely located northeast of the Ujung Pangkah field, near the Reog prospect.
summary: Bass Oil has a HoA to acquire a 100% interest from Azipac in the North Madura PSC in coastal shallow waters off Java.