15 Rheola Street West Perth WA 6005 | Telephone +618 9213 4300 Facsimile +618 9213 4311 | |
ABN 51 000 753 640 | PO Box 512, West Perth Western Australia 6872 | Web: www.lionenergy.com.au ASX Code: LIO |
ASX RELEASE For immediate release 31 October 2012
SOUTH BLOCK "A" FARM-IN APPROVED
On June 28th, Lion Energy Limited ("LION")
announced that KRX Energy Pte. Ltd. ("KRX") (through its
wholly owned subsidiary, KRX Energy (SBA) Pte. Ltd.) had
executed a Farm-in Agreement for the SOUTH BLOCK "A"
Production Sharing Contract in Indonesia and acquired a
35% non-operating participating interest in return for
certain funding commitments in the forward work program
approved by the SOUTH BLOCK "A" joint venture. The formal
transfer of the interest to KRX was subject to Indonesian
government approval.
The Operator has received written notification from the Indonesian Ministry of Energy and
Mineral Resources formally approving the transfer to KRX Energy (SBA) Pte. Ltd.LION currently holds a 30.77% equity interest in KRX and retains the exclusive right, but not the obligation, to move to a 57.14% equity position through additional funding of A$2 million
to KRX.
1. ABOUT SOUTH BLOCK "A" 1.1. POTENTIAL
The SOUTH BLOCK "A" farm-in represents a relatively low cost
entry into a significant inventory of prospects and leads in
close proximity to existing production and infrastructure
that will facilitate early exploitation
of discoveries.
The extensive prospect and lead inventory within the
2,105 sq.km. SOUTH BLOCK "A" area has un-risked potential
ranges (on a 100% basis) of:
OIL CASE: 87 - 475 MMBBL GAS CASE: 370 - 1,994 BCF
A seismic survey is scheduled in Q4 2012 to delineate high
ranked prospects with exploration
drilling programmed for 2013.
Cont'd…/2
Lion Energy Limited ASX Release 31 October 2012, page 2 of 3
1.2. SOUTH BLOCK "A" BACKGROUND
The SOUTH BLOCK "A" Production Sharing Contract was executed
May 5th 2009 between PT Realto Energi Nusantara
Corelasi ("RENCO"), PT Prosys Oil & Gas International
("POGI") and Badan Pelaksana Kegiatan Usaha Hulu Minyak dan
Gas Bumi ("BPMIGAS") representing the Government of the
Republic of Indonesia.
RENCO (with a 51% participating interest) was the designated
Operator at the outset, however
it subsequently transferred its interest in the Contract and
Operatorship to RENCO Elang Energy Pte Ltd, a company
incorporated under the laws of the Republic of Singapore
("REE") and received approval of the transfer from
BPMIGAS.
Post the farm-in of KRX, participating interests in the SBA
PSC are:
• 51% RENCO Elang Energy Pte Ltd
• 14% PT Prosys Oil & Gas International
• 35% KRX Energy (SBA) Pte Ltd
KRX will pay 49% of the gross cash calls of US$8,000,000 made
by the Operator, to a maximum of US$3,920,000 as
consideration for KRX's 35% interest.
KRX Energy (SBA) Pte. Ltd.'s title to the 35% participating
interest is delivered free and clear of all loans, liens,
mortgages and any other encumbrances, specifically clear of
any requirement to pay or reimburse POGI for any already paid
signature bonus, or a part thereof.
• LION announced on June 18th 2012 that it had
executed an agreement with KRX, a Singapore registered
company, paving the way for LION to provide ongoing funding
for the company as it moves forward with acquisition and
development of oil and gas interests in SE Asia.
• On June 25th 2012, LION lodged the first
instalment of A$420,000 of the initial firm funding
of A$1 million by way of subscriptions for KRX shares at
$0.05 per share.
• On October 26th 2012, LION announced it had
lodged the final instalment of A$580,000 of the initial firm
funding of A$1 million by way of subscriptions for shares in
KRX at $0.05 per share and by this subscription LION has
moved to a 30.77% shareholder position in KRX.
• KRX started in 2010 to build a dynamic, growth oriented, SE
Asian focused, oil and gas exploration portfolio by:
Leveraging existing knowledge base to delineate under-
explored assets in proven areas
• Identifying win-win commercial solutions
• Appropriate partnering
• Use of best-in-class consultants/consulting companies
• Fast-tracking exploration and appraisal/ development
• Become leading unconventional (shale gas) acreage holder in
region
KRX has a highly experienced, well respected management team
with excellent technical and managerial skills and big
company expertise as well as a network of expert consultants
and advisors to ensure technically astute, thorough and cost
effective operations. Within this
Lion Energy Limited ASX Release 31 October 2012, page 3 of 3
nimble, small company environment, management has
demonstrated a prudently aggressive approach to developing
and securing opportunities.
Roger Whyte, the Managing Director, is a geophysicist with
extensive SE Asian experience and proven management skills as
CEO of an ASX listed company.
Kim Morrison, the Technical Director, is a geologist with
extensive operational and business development skills, with
worldwide experience and a strong SE Asia focus.
LION, through its wholly owned subsidiary Lion International
Investment Limited, holds a 2.5% shareholding in the Seram
(Non Bula) Block Renewal Production Sharing Contract (SNBB).
The major shareholder and Operator of the Joint Venture is
CITIC Seram Energy Limited (51%). Other partners include
KUFPEC (Indonesia) Limited (30%) and Gulf Petroleum
Investment (16.5%).
The SNBB contains the producing Oseil Oilfield which has
cumulative production in excess of 10 million barrels and
continues to produce approximately 2,500 BOPD.
An exploration well, LOFIN-1 was spudded within the SNBB on
January 17th 2012 and has reached Total Depth of
4,427 meters (14,525 feet) MD and encountered a significant
gross hydrocarbon column in excess of 500 feet. Testing
currently underway will be evaluated to determine the
significance and commercial potential of this discovery.
Following a restructure of shareholding agreed to by shareholders in February 2012, LION has and continues to pursue upstream oil and gas opportunities. In addition to the KRX opportunity outlined herein, the Company is vigorously pursuing other low risk opportunities globally.
NomenclatureBCF Billion cubic feet BOPD Barrels of oil per day MMBBL barrels of oil x 1,000,000
Enquiries:
Contact Jack Toby (Company Secretary) Telephone: (08) 9213
4300
Email: info@lionenergy.com.au
Information in this report that relates to Hydrocarbon Reserves and or Resources is based on information compiled by Mr Russell Brimage, Director of Lion Energy Limited who has consented to the inclusion of that information in the form and context in which it appears.
Mr Brimage has over 30 years experience in the application of engineering to the petroleum industry in oil and gas exploration and production, both in Australia and internationally, as either an employee or consultant to oil companies operating in the upstream petroleum industry. Mr Brimage reviews the Company's operations with the help of various professional consultants, appropriately qualified and experienced in their respective fields within the upstream petroleum industry. He is also an Associate Member of the Society of Petroleum Engineers.
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