UK-listed Coro Energy plc announced on 3 September 2018 an agreement to acquire a 42.5% interest in the Bulu PSC, located on offshore East Java Basin, from AWE (now a subsidiary of Mitsui). The block contains the Lengo gas field, which has an approved Plan of Development (POD) in place and is pending Gas Sales Agreement (GSA).  The deal overrides a previous agreement between AWE and HyOil, which did not come to completion and has been terminated. Coro will work with AWE and HyOil towards a tripartite deal, which will include a total consideration payable by Coro of USD 10.96 million plus cost reimbursements, broken down as follows:    USD 2 million to HyOil in new      ordinary Coro shares upon closing of the transaction.  An additional USD 1 million to      HyOil in new ordinary Coro shares upon signing of the first GSA.  A further USD 1 million to HyOil in      new ordinary Coro shares after approximately six months from commercial      production startup.  USD 6.96 million in cash to AWE,      plus back costs and other working capital adjustments amounting to an      estimated USD 1.04 million.   Upon closing of the deal, Coro will hold a direct 42.5% participating interest in the PSC. Partners in the PSC will remain KrisEnergy (42.5%, operator) and local companies PT Satria Energindo (10%) and PT Satria Wijaya Kusuma (5%). KrisEnergy is continuing to offer its stakes in the block for sale.  The transaction is subject to various conditions including joint venture partner pre-emption rights and regulatory approvals. The original agreement between AWE and HyOil for the Bulu PSC was announced in May 2016, however it did not come to completion, pending final approvals.  This acquisition marks the first entry of Coro Energy in South East Asia upstream business. The company intends to further expand its portfolio in the region, and will continue to evaluate entry opportunities targeting growth assets with a focus on Indonesia, Malaysia and Vietnam. Coro is currently generating cash flow from production assets in onshore Italy.  The Plan of Development for the Lengo field was officially approved in 2014 and FEED works were carried out in 2015. GSA negotiations are ongoing. According to Coro, an MOU for gas sales was signed in January 2018 for potential supply to the Tuban industrial complex in East Java. The field is estimated to contain 2C resources of 359 Bcf of dry gas.  Background Information  Indonesian company PT Petroland Energi, through its subsidiary Sebana Ltd, was awarded the Bulu PSC on 14 October 2003, under the "Third Round" of Migas acreage releases which closed on 31 July 2003. Signature bonuses totaled USD 3 million and the PSC carried a work commitment amounting to USD 6.9 million in the first three years. Sebana Ltd was partnered by Gwinet Ltd (10%), owned by PT Satria Energindo, the largest shareholder in PT Petroland Energi.  The Lengo 1 well was spudded on 8 March 2008 and was plugged and abandoned at a TD of 986 m on 7 April 2008. The well flowed 12.8 MMscf/d with gas (having less than 15% CO2) present over a 42 m interval in both the Upper Oligocene/Lower Miocene Kujung I carbonate unit and Middle Miocene Ngrayong sandstones. The Lengo East 1 wildcat was plugged and abandoned in mid-June 2010 with the well encountering gas. The well, located 20 km east of the Lengo 1 discovery in the adjacent Bulu PSC, was spudded on 28 May 2010 using Transocean's "Trident IX" J/U rig and was drilled to a TD of 872 m, shallower than the PTD of approximately 1,000 m. It targeted the Oligocene to Lower Miocene Kujung carbonates and the Middle Miocene Ngrayong sandstones. Partner AWE Limited elected not to participate in this drilling campaign and then-operator Pearl drilled this as a âsole riskâ well.  KrisEnergy announced the completion of the Lengo 2 appraisal well on 17 May 2013, with the well drilled to TD at 838 m. Two DSTs have been conducted over the main Kujung I carbonate reservoir. The first DST, between 736 m and 757m, flowed 4.8 MMscf/d of gas with a flowing wellhead pressure of 587 psig. The second DST, between 736 and 784 m, flowed 21 MMscf/d of gas with a flowing wellhead pressure of 487 psig, with the flow rate constrained by surface equipment. Approximately 42 m of core have also been collected from the reservoir interval. According to the operator, the good test results showed that the Kujung I reservoir is better developed in Lengo 2 than in discovery well Lengo 1.
Coro Energy (formerly Saffron Energy in Italy) has signed conditional agreements for its 1st Indonesian asset, a 42.5% stake from AWE in the 698-sq km Bulu PSC for US%11 MM.