MEO increases Indonesian interest

THE BOURSE WHISPERER: The wholly-owned subsidiary of Melbourne-based MEO Australia, South Madura Exploration Company, has executed binding transaction documents to acquire an additional 60 per cent participating interest in the South Madura PSC, situated onshore of Madura Island, Indonesia, in a deal that has been struck with AED South Madura BV.

In June this year, MEO acquired a 30 per cent participating interest in the PSC.

A consideration of US$0.3 million is payable upon completion of the transaction and receipt of requisite Governmental approvals.

 

South Madura PSC location map. Source: Company announcement

 

The South Madura PSC covers an area of 1,586 square kilometres and is scheduled to expire in October 2013.

The remaining ten per cent interest in the project is held by PT Eksindo South Madura.

MEO said it considers the PSC to be prospective for oil.

Subject to completion of the transaction, MEO said it intends applying to the regulator for a variation to the work program involving acquisition of seismic to advance one of several identified leads to a drillable prospect status.

“In the event that MEO completes the transaction, obtains regulatory approval for a work program variation, acquires seismic and matures one of the identified leads to drillable status, a partner will be sought to fund a potential 2013 drilling campaign,” MEO said in its ASX announcement.
 
“This acquisition is consistent with MEO’s strategy of expanding its portfolio by securing a high initial participating interest at a low entry cost in areas with proven hydrocarbon systems, where the company considers it can add technical value before farming down to larger industry participants who are seeking attractive, drill ready, growth opportunities.”