Oil and Gas News

Jadestone takes 90% interest in Indonesian project

Jadestone Energy has agreed to acquire Mandala Energy Lemang’s 90 per cent operating interest in the Lemang production sharing contract (PSC) onshore Indonesia.

The Lemang PSC is located onshore Sumatra, with the block including the Akatara gas field that has a best estimate gross undeveloped wet gas in place of 115 billion standard cubic feet (bscf).

Jadestone believes the $US12 million ($17.2 million) acquisition represents exceptional value for its shareholders.

In addition, the acquisition also introduces diversification and balance to the company’s portfolio through future fixed pice gas production, reducing its blended unit operating costs and an opportunity to re-establish credentials as an operator in Indonesia.

“The acquisition does not compromise the company’s ability to fund the remainder of its planned capital spending in 2020, its maiden dividend, or closing of the Maari acquisition which remains on track for the second half of 2020,” Jadestone outlined.

The company expects the agreement will be completed in the first half of 2021, conditional upon customary government approvals.

Jadestone president and chief executive officer Paul Blakeley said the company had re-established its operating presence in Indonesia and further balanced its portfolio by adding a new gas resource to its reserves base. 

“In addition to providing much-needed energy to a region of Indonesia, which will benefit from it, this acquisition creates an opportunity to renew key relationships in Sumatra with local stakeholders, service providers and communities with whom we have worked closely in the past through the team’s involvement in Ogan Komering, and various other assets in prior times,” Blakeley said.

Reflecting on the current economic climate, Blakeley added that the company’s deliberate measure to conserve capital resources in 2020, Lemang PSC provided it with flexibility in the forward spending profile.

“The PSC carries no near-term spending commitments, doesn’t expire until 2037, and as such, affords us the discretion to time the development such that spending dovetails with other high-value investments across our portfolio,” Blakeley concluded.