New Zealand Oil & Gas (ASX: NZO) and its partners have signed an Indonesian production sharing contract for a prospective oil and gas exploration block in Northern Sumatra.
A number of leads and prospects have already being identified in the 5022 square kilometre Bohorok block, the northern part of which is adjacent to and partly surrounds several oil and gas fields.
These include the Timur and Wampu fields.
The joint venture has committed to acquiring 200 kilometres of 2D seismic and a range of geological studies for the initial three year exploration work programme.
Including the $1 million signature payment, this is expected to cost about $4 million. NZOG is paying half of this amount.
Besides NZOG with its 45 percent interest, the other partners are operator Bukit Energy Asia (45 percent) and PT Surya Buana Lestarijaya (10 percent).
NZOG also has a 22.5 percent stake in the Kisaran permit in central Sumatra, where at least one well is planned for later this year, and has additional Sumatra Joint Study Agreements in progress.