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LONDON (Alliance News) - Coro Energy PLC said Monday it will buy a 15% stake in an Indonesian offshore gas field for USD4.8 million.
The company will buy a 15% interest in the Duyung production sharing contract located in the West Natuna basin from a private company, West Natuna Exploration Ltd, owned by Conrad Petroleum Ltd and Empyrean Energy PLC.
Conrad Petroleum owns 90% of West Natuna Exploration, while London-listed Empyrean Energy owns the remaining 10%.
In September 2018, Coro signed a binding agreement to buy 42.5% stake in the Lengo gas field, offshore East Java in Indonesia.
The Duyung PSC contains the Mako gas field, together with low-risk step-out exploration upside, according to Coro Energy. Conrad Petroleum serves as operator of the Mako field.
According to independent estimates, the Mako field contains gross 2C resources of 276 billion cubic feet of recoverable dry gas and gross 3C resources of 392 Bcf.
"We see this [acquisition] as a potential hub for wider value creation in the [South East Asia] region and look forward to reporting on our further progress shortly," said Chief Executive James Menzies.
The USD4.8 million consideration for the stake acquisition comprises of USD2.9 million in cash and USD1.9 million in Coro shares, plus USD10.5 million in partial funding of the 2019 drilling programme.
Coro intends to fund the stake acquisition via issue of bonds. It has agreed with investors Lombard Odier Asset Management (Europe) Ltd and Pegasus Alternative Fund Ltd (SAC) the pair to subscribe to, and underwrite, a minimum issue of EUR22.5 million Eurobonds.
The company will receive EUR19.1 million in cash from the bond issue.
Separately, Empyrean Energy said it will receive USD295,000 in cash and consideration shares worth USD185,000 for the transfer to Coro of 1.5% of its current 10% interest in the Duyung PSC.
Following completion of the deal, the owners of the Duyung PSC will be Conrad with 76.5% stake, Empyrean with 8.5% and Coro with 15%.
Shares in Coro Energy were down 9.4% at 2.40 pence each on Monday morning. Empyrean Energy shares were down 1.4% at 8.65 pence each.
