You are here

Mandala Energy to invest in 35% stake in Ramba's Lemang PSC

Monday, October 5, 2015 - 08:38
534848461.jpg
David Soeryadjaya, chief executive officer (CEO) and executive director of Ramba Energy.

MANDALA Energy will invest up to US$179.6 million in a 35 per cent stake in the Lemang Production Sharing Contract (Lemang PSC) from Ramba Energy's subsidiary, PT Hexindo Gemilang Jaya.

Ramba Energy is an Indonesia-focused oil & gas exploration and production company. The Lemang block is located in the northernmost part of the South Sumatra basin, a proven region for oil & gas production.

The sum includes an upfront cash payment of US$26.25 million, sliding-scale future contingent payments based on certification of oil & gas reserves, partial carry for Ramba's share of three exploration wells; and a cash payment upon declaration of the first new exploration discovery.

Hexindo at present owns 51 per cent in the Lemang PSC.

Under another concurrent agreement, Hexindo shall acquire 15 per cent of Lemang PSC from Eastwin - which currently owns a 49 per cent stake in Lemang PSC. As a result, Hexindo will retain a 31 per cent per cent stake in Lemang PSC.

Mandala, backed by international investment firm Kohlberg Kravis Roberts & Co (KKR), is a South-east Asia-focused oil & gas exploration and production company.

The deal allows Ramba to realise value from its investment in Lemang PSC, and allows it to leverage Mandala's technical and financial capabilities, it said.

Ramba chief executive David Soeryadjaya said: "Mandala's decision to select Indonesia as the location of its first transaction greatly underscores our view of Indonesia as a desirable investment destination. Mandala and Ramba's collaboration is a unique coming-together of two partners with complementary skillsets, which we both look forward to leveraging. Despite the current low-oil-price environment, this partnership validates Ramba's overall strategy and the positive economic returns we expect from the Lemang block."

Meanwhile, Mandala chief Barry O'Donnell underlined that the deal is an "excellent first step" in building up its South-east Asia portfolio.

The deal is subject to the approval of the Government of Indonesia.

Powered by GET.comGetCom