Ramba Energy to farm out 25% of Lemang project to strategic investor

RAMBA Energy has signed a memorandum of understanding with a strategic investor to farm out a 25 per cent working interest in the Lemang production sharing contract (PSC) from its 80.4 per cent owned Indonesian subsidiary PT Hexindo Gemilang Jaya.

Under the MoU signed on Sept 6, the aggregate consideration for the proposed transaction is up to US$128.25 million, which consists of US$18.75 million upfront cash payment while the rest will be payable once certain milestones are achieved.

In an announcement to the Singapore Exchange, Ramba Energy said it will make a separate announcement to disclose the identity of the investor when the definitive agreements are executed by Sept 25.

"Oil and gas exploration is an expensive, high-risk operation. Shareholders are therefore advised to exercise caution when dealing in shares of the company," it said.

Trading in the shares of Ramba Energy have been halted since Sept 2 pending the announcement and will resume on Monday. The counter was last traded at 20.5 Singapore cents.