document: Jadestone Energy reported on 29 June 2020 that it has signed an agreement with Mandala Energy to acquire the latter's 90% operating interest in Lemang PSC, located onshore in South Sumatra. The deal will involve an initial amount of USD 12 million in cash and a further USD 5 million to be paid upon first gas onstream, plus other contingent payments amounting to USD 26.7 million in the event of positive outcome.  The deal is subject to approval from the Government of Indonesia and Jadestone hopes to close by Q1 2021, upon which Jadestone will hold 90% operating interest and PT Hexindo Gemilang (a subsidiary of Eneco Energy) will retain the remaining 10% participating interest (PI). The regional government has the right to acquire 10% PI of the PSC according to the Ministerial Regulation No. 37/ 2016.  The PSC contains the Akatara field which ceased oil production in December 2019 after reaching the economic threshold for oil production.   The Akatara field was brought onstream in November 2016. As of late 2018, the field was producing over 1,000 bo/d. Mandala was planning to conduct further development activities, such as artificial lift, to increase production to 2,000 bo/d. Gas from the field has not been commercially produced, however Mandala was previously in negotiations to supply 25 MMcfg/d to PT PGN.  Background Information  The Lemang PSC was officially awarded on 18 January 2007 to PT Hexindo Gelimang Jaya (a majority-owned subsidiary of Ramba Energy) (59%) and PT Indelberg Indonesia (41%). Firm commitments included 500 km 2D seismic acquisition, 500 sq km 3D seismic acquisition and drilling of four wells. The 2D seismic acquisition commitment was fulfilled in early June 2012 with the completion of a 550 km 2D seismic survey. This survey commenced in late September 2011 and was conducted by Quest Geophysical Asia.  Ramba Energy completed the acquisition of 41% participating interest in the PSC from Indelberg in November 2010. In late 2011, a new joint operating agreement was reached by which Eastwin Global Investments entered the block with a 49% interest, and the remaining 51% stakes were consolidated into Hexindo.  In late April 2014, Ramba Energy announced that it has commenced a process to farm-out its stake in the PSC.  In October 2015, Ramba and Mandala Energy signed a farm-out agreement by which Mandala earned a 35% interest in the block for a total investment of up to USD 179.6 million. The deal was completed in February 2016. Along with the farm-out to Mandala, Hexindo acquired a 15% interest from the other PSC partner Eastwin Global Investment such that the net effect of the agreement resulted in Mandala, Hexindo and Eastwin holding 35%, 31% and 34% stake respectively in the block.  On 1 October 2018, Mandala exercised the option to acquire the additional 6% interest from Eneco Energy (formerly Ramba Energy). The option was part of the original farm-out deal signed in September 2017, by which Mandala initially acquired a 15% interest from Hexindo. The deal received approval from SKK Migas on 10 June 2019 and subsequently completed in July 2019. The deal saw Mandala holding a total of 90% operating interest and Hexindo retained 10% PI.  Akatara field development  First oil production from the Akatara field was achieved on 16 November 2016. The milestone was reached following the issuance of the necessary forestry lease permit by Indonesian Ministry of Forestry and Environment. Initial production was expected to reach 500 bo/d from the Akatara 2 well. The operator planned to increase output with additional production from other existing wells and from new development wells drilled from 2017 onwards.  The development plan for the block includes the recompletion of exploration wells Selong 1, Akatara 1 and Akatara 2, followed by eight new development wells and two step-out wells. Production was initially achieved through temporary facilities (Early Production Facilities). In this early stage, oil was transported by truck to the Tempino field and from there is pipelined to the Plaju refinery. In a later phase, the operator plans to install permanent facilities, possibly with a higher production capacity. A new pipeline was also planned to be built, in order to connect the block directly with the Plaju refinery.  The block was expected to produce up to 4,000 bo/d during the early production phase. Commercial gas production is expected to commence at a later stage. According to local media, quoting the operator in late February 2017, the block could potentially produce approximately 10,000 bo/d by 2022 if further development activities are conducted. The block is estimated to carry 115 Bcf of wet gas in place (best estimate).
summary: Indonesia (Tiga Puluh Arch) Lemang op. by MANDALA EN (90%), ENECO EN (8%), TRIDATU (2%)