LONDON (Alliance News) - Oil and gas investment company Andalas Energy & Power PLC on Wednesday said it has struck a deal to acquire a 30% direct working interest in the Tuba Obi East oil and gas concession in the Jambi Province of Indonesia's Sumatra.
Andalas has signed a heads of agreement to buy a 30% interest in the concession through a farm-in arrangement with the operator, PT Akar Golindo. The pair will work together on the work programme for the project, due to cost around USD1.1 million, with Andalas to pay another USD500,000 to Akar Golindo if the concession is renewed.
Andalas said the deal will constitute a reverse takeover under AIM rules and will therefore require shareholder approval.
It said its study on the project has indicated a strong market for gas in the region and said the project could produce gas both to export and to sell to power companies in the area.
"A farm in to the TOE concession in Indonesia will give us a 'beach head' to build a significant gas business in the country. This is the result of many months' work during 2015 by our team and our extensive network of Indonesian gas and power industry experts," said David Whitby, Andalas' chief executive.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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