The asset is known as Langsa TAC and is a 77km² offshore concession in 325 ft of water depth, 55km from the North Sumatra shoreline.
The block has 2 discovered fields, known as the L and H fields, and 7 wells. Historic sunk costs for the Langsa TAC are approximately $59.5m. Mobil Oil initially made the discovery in 1980.
The Company and BSL intend to enter into a formal securities purchase agreement for the acquisition following accordance with normal industry standards, requisite regulatory requirements and approvals in the US, Canada and Indonesia.
Under the terms of the agreement, the Company will acquire 100% of the shares of BSL from the BSL shareholders for $7.5m consisting of $1m cash at closing and $6.5m to be paid from 15% of cash flow (net to BSL’s interest) generated by Langsa TAC. At closing, BSL will hold a total of 65% interest in Langsa TAC.
Following execution of the MOU, the Company will proceed to conduct due diligence on BSL, including evaluation and field inspection of the Properties, prior to the execution of the SPA.
