London listed company, Coro Energy Plc (LSE: GB00BJQR7736) has renegotiated the terms of proposed acquisition of 42.5 percent stake in Lengo gas field within Bulu PSC East Java sea, it said on Thursday (07/18).

JAKARTA (TheInsiderStories) – London listed company, Coro Energy Plc (LSE: GB00BJQR7736) has renegotiated the terms of proposed acquisition of 42.5 percent stake in Lengo gas field within Bulu PSC East Java sea, it said on Thursday (07/18). The original Acquisition terms were announced on Sept. 18, 2018.

The Southeast Asian focused upstream oil and gas company said the initial consideration payable included a cash of US$6.96 million. And the back costs and other working capital around $1.04 million, which were both to be paid by Coro Energy in cash to Australian AWE Limited and up to $4 million in new ordinary shares to Singapore’ HyOil (Bulu) Pte. Ltd.

Under the revised acquisition terms, the energy producer firm will pay in four tranches. First tranche, the company will pay $2.5 million, which will include $1.46 million in cash plus the reimbursement amount.

Second tranche with worth of $1.5 million on Sept. 1, 2020. Then, third tranche worth of $2.5 million on the sooner of Bulu PSC partners agreeing the final investment decision to proceed with the financing, development and construction of the project pursuant to the approved plan of development or July 1, 2021.

Moreover, Coro Energy to pay another $1.5 million on the sooner of the date of commencement of commercial production from the Bulu PSC or  Dec. 31, 2022. All other terms oremain as originally planned, including the payment of the equity payable to HyOil in three tranches.

In the beginning, the energy player will pay the shares with worth $2 million by the issue of 42.43 million new ordinary shares of the company at 3.6255 pence each, being equal to the 30 day volume weighted average price of the shares at the time of announcement of the acquisition on Sept. 3, 2018.

Then, $1 million on signature of a first gas sales agreement satisfied by the issue of new shares issued at a price equal to the last closing price of the ordinary Shares, as reported by the London Stock Exchange (LSE), following the date of signing the first gas sale.

Next, Coro Energy pay another $1 million in new shares following the start of commercial production from the field. These ordinary shares to be issued at the closing price as reported on LSE on the date falling five months and three weeks from production start-up. 

James Menzies, Chief Executive Officer, commented: We look forward to completing the acquisition in due course and concluding an agreement for the sale of Lengo gas, as the next significant milestone in taking this project forward.”

Previously, the company anounced to acquired a 42.5 percent stake in the Lengo gas field for around $12 million. The field of development plan has been approved by the Indonesian authorities.

The company targeting the Tuban industrial complex in East Java as the gas buyer for Lengo gas field. The regional gas prices currently in the range of $5.50 to $8 per MMBTU. Its predicted the project will need costs $100 million.

Menzies said this first Indonesian acquisition provides Coro Energy with a strong initial platform on which to progress South East Asian growth strategy. Coro Energy, AWE and HyOil will be working together and with relevant government authorities to close these new agreements.

As a result of these transactions, Coro Energy will become a direct 42.5 percent holder at the Bulu PSC. The remaining 57.5 percent participating interest in the Bulu PSC is held between sole operator Kris Energy 42.5 percent and two local partners, Satria Energindo 10 percent and Satria Wijaya Kusuma 5 percent.

Written By Willy Matrona, Email: theinsiderstories@gmail.com

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