Lion Energy has announced it has increased its interest in the South Block A PSC. Lion, in conjunction with Operator REE, have exercised their rights to default Prosys Oil & Gas International (POGI).
POGI’s 14% interest will be taken up pro-rata by Lion and REE, as per the Joint Operating Agreement (JOA) covering the South Block A PSC. As a result of the default, Lion will hold 40.7% (previously 35%) and REE will hold 59.3% interest (previously 51%).
While POGI will not benefit from any potential success of the upcoming Amanah Timur-1 well, under the JOA it remains responsible for any incurred/outstanding PSC liabilities including its share of unpaid cash calls. Lion’s incremental share of the Amanah Timur-1 drilling cost is estimated to be around US$74,000.
Lion’s CEO Kim Morrison commented:
'We are pleased to be increasing our equity in South Block A PSC as Lion considers this to be one of the most prospective exploration blocks in Sumatra. Underfunded partners are a fact of life in the present industry environment and we are glad to have this uncertainty resolved. We now enter the exciting drilling phase with a fully aligned partner and with the increased equity providing us additional leverage in this highly attractive block.'
For more information, please visit: http://www.lionenergy.com.au
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/24112016/lion-energy-increases-interest-in-south-block-a-psc/