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(Sharecast News) - Asia-Pacific oil and gas company Jadestone Energy announced the acquisition of the remaining 10% interest in the Lemang production sharing contract, onshore Indonesia, on Wednesday.
The AIM-traded firm said that as a result, its interest, before local government back-in rights, in the Lemang PSC had increased to 100%.
It said the 10% interest was acquired through the execution of a settlement and transfer agreement between Jadestone and PT Hexindo Gemilang Jaya.
In return for the transfer of Hexindo's 10% stake, Jadestone released Hexindo from unpaid amounts relating to its interest in the Lemang PSC, and paid a consideration of $0.5m including transfer taxes, which Jadestone would remit directly to the Indonesian government.
The Lemang PSC contains the Akatara gas field development, which reached final investment decision in June.
Jadestone said the field was independently estimated to contain 18.7 million barrels of oil equivalent of gross 2C resource, and was being developed to displace coal in local gas-fired power generation, as well as condensate sales and LPG for local residential use.
Production was on track for the first half of 2024.
Once onstream, the Akatara development would broaden Jadestone's production base, as well as increase the proportion of gas in its production mix, thus reducing its greenhouse gas emissions intensity.
"We have acquired Hexindo's interest for 26 cents per barrel of oil equivalent of 2C resource, compared to the original acquisition cost of 70 cents in 2020 - a very attractive bolt-on deal for Jadestone, particularly given the significant commercial and development progress since the initial acquisition was announced," said president and chief executive officer Paul Blakeley.
"Activity at the Akatara gas development project is progressing well and we remain on track to deliver this key organic growth project for Jadestone in the first half of 2024."
At 1247 GMT, shares in Jadestone Energy were down 1.9% at 72.2p.
Reporting by Josh White for Sharecast.com.
