Kuala Lumpur's Mitra Energy acquired 30% interest in two blocks, Block 05-1B and Block 05-1C offshore Vietnam, from Inpex subsidiary Teikoku Oil in a US$14.3 million deal.
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Image from Inpex. |
Block 05-1, which includes 05-1B and 05-1C are located 350km in the Nam Con Son Basin in water depths of around 120m.
The production-sharing contract (PSC) holds two fully appraised gas and condensate discoveries, Dai Nguyet and Sao Vang, in close proximity to the Nam Con Son gas transportation pipeline and existing production facilities.
These gas discoveries are strategically located to supply gas to operating power generating complexes in the industrial center of Southeast Vietnam.
Partners in Block 05-1 are Idemitsu Oil and Gas and JX Nippon Oil & Gas Exploration, each with a 35% working interest.
Mitra said the proposed Block 05-1 acquisition is consistent with its strategy to acquire near-term development projects with low-risk upside potential.
The deal will further strengthen the company’s position in Vietnam and add to its existing U Minh and Nam Du gas discoveries in the Malay Tho Chu Basin.
“This is a very important follow-on acquisition to the recently announced Stag Oilfield deal in the Carnarvon basin,” said Paul Blakeley, executive chairman of Mitra.
“Having secured a solid operating platform at Stag, we now want to build out the portfolio with further highly accretive acquisition opportunities, in our target areas, which will deliver a strong and sustainable business in Asia Pacific.
“Block 05-1 holds significant appraised gas resource capable of being developed quickly and put onto production at high margins and with material value accretion within our portfolio.”
Blakeley said the sale of this gas into the power sector in Vietnam is a natural hedge in a low oil price world. He said the project also has a high likelihood of early approval being so well positioned, close to the Nam Con Son pipeline, to deliver gas to existing industrial consumers and for power generation.
As part of the agreement, Mitra may also be responsible for certain contingent payments, which are linked to the project sanction and the delivery of first sales gas from the project, in the amounts of $9.8 million and $5.9 million, respectively.
ERC Equipoise has been commissioned to prepare an independent resource assessment of the Dai Nguyet ad Sao Vang fields in Vietnam to complement Mitra’s internal review and evaluation of the reserves.
Stag Oilfield deal
Last month, Mitra signed a deal with Quadrant Northwest and Santos Offshore to acquire 100% interest in the offshore Stag Oilfield for $10 million.
Located 60km offshore Western Australia in the Carnarvon Basin, and in a water depth of approximately 47m, the field has been in production since 1998. It currently produces 3750 bbl/d from 10 active wells.
This acquisition will see the company gain operatorship and full ownership of the assets in production and development, with the potential to further expand the drilling and production activities at Stag.
Mitra said it has identified various cost reduction measures to continue to lower operating costs for the field. Future activities planned for Stag Oilfield include one appraisal pilot and three infill producers in the West area in 2017; and up to three further wells in the East area in 2018.
It will also consider appraisal activities in the undrilled low-risk exploration area of Hart and Stag South.
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