Australia’s AED to get 50pct interest in Brunei block
Bandar Seri Begawan – Melbourne-Based AED Oil Ltd has agreed to buy Nations Petroleum (SE Asia) Limited to own 50 per cent operating interest in the Brunei Block L oil and gas permit.
In a statement released yesterday, AED announced it has signed a Letter of Intent (LoI) with Nations Petroleum Co Ltd to acquire 100 per cent of Nations’ wholly owned subsidiary.
The Brunei Block L oil and gas permit covers about 2,200 square km both onshore and offshore, AED said.
AED will pay Nations US$3 million ($4.2 million) cash and issue 24 million new AED shares, which, based on AED’s current share price of A$0.57, values the deal at about AUD$16.9 million ($22 million).
AED said Nations will end up with a 14.5 per cent holding in the Melbourne-based oil exploration company at the deal’s completion.
The other 50 per cent of the Brunei Block L consortium is owned by Loon Brunei Ltd (40 per cent) and QAF Brunei owns the remaining 10 per cent.
Nations has in the last 12 months undertaken a seismic programme costing it US$20 million ($28 million) over a large portion of Block L which has identified several drill ready prospects.
Planning for a drilling campaign for early 2010 has reached advanced stages.
The Lol provides an exclusivity period which allows for approvals to be granted and formal documentation to be completed and executed, which will lead to the acquisition of the issued capital in the Nations wholly owned subsidiary holding the Block L assets, AED said.
The transaction will be subject to a number of conditions including the necessary approvals by PetroleumBRUNEL Block L is under PetroleumBRUNEI’s jurisdiction.
Pedro De Souza, managing director of AED, said they are very pleased with the proposed transaction with Nations for Brunei’s Block L.
“Having reviewed a range of business development opportunities, the Company believes that the acquisition is consistent with its development and operating experience in the Puffin Field and should provide considerable potential upside in valuation,” De Souza said, adding that AED is also evaluating Asian assets held by other Nations’ wholly owned subsidiaries and an exclusivity period has been agreed over these assets.
AED commenced oil production at its Puffin field on October 6, 2007. The company’s production is from two horizontal wells, Puffin-7 and Puffin-8 located in the Puffin North East area.
The Australia-based company has to date drilled five wells (Puffin-7.8,9,10 & 11), with the sixth (Puffin-12) to follow shortly.
In June last year, Loon Brunei, which owns 50 per cent operating interest in Block L said it was setting aside $25 million for the project.
Country manager Narawi Merusin said in an interview last year that the firm was set to start the seismic survey after months of briefing with Tutong residents and assuring them the firm would compensate them for any damage to their livelihood or properties due to the survey.
Block L covers the whole of Brunei-Muara with some parts of Tutong and Temburong.
Category: ResourceAsia
