Canada’s Criterium Energy has acquired a 42.5% interest in the Bulu production sharing contract (PSC) holding the Lengo gas field offshore Indonesia for $1.6 million. Significantly, the company is seeking more complimentary assets in Southeast Asia.
The Bulu PSC is located offshore East Java, and holds the Lengo gas field discovered in 2008 with Lengo-1 well flow tested 12.9 MMscfd and appraised in 2013 by the Lengo-2 well, which flow tested 20.6 MMscfd. Crucially, it is near major demand centres in Java.
Criterium entered into a binding agreement on 20 December with a subsidiary of Mitsui E&P Australia Holdings Pty Ltd (“MEPAU”) for the acquisition, through a wholly-owned subsidiary of Criterium of the outstanding shares in AWE (Asia) Ltd., a New Zealand registered company which owns a 42.5% non-operated working interest in the Bulu PSC via a wholly owned subsidiary also registered in New Zealand.
As a result of this Acquisition, Criterium, through its wholly-owned subsidiary and AWE(Asia) Ltd. became a 42.5% holder of the Bulu PSC. The remaining 57.5% participating interest in the Bulu PSC is held between Kris Energy (Satria) 42.5% and two local partners, Satria Energindo 10% and Satria Wijaya Kusuma 5%.
The company’s arrival, marks another Independent player making an entry in Southeast Asia, joining Hibiscus Petroleum, Jadestone Energy, Valeura Energy, as well as Conrad Asia Energy, and most of these players have continued to expand their portfolio within Southeast Asia.
“Continuing the trend from last year, regional and independent players have dominated the buyer’s segment in Southeast Asia, with over 70% of buyers this year made up of regional players, global independents, and private equity-backed players,” noted Prateek Pandey, vice president analysis at Rystad Energy.
Pandey added that some of the key reasons that attract global Independent players to Southeast Asia are:
— Existing discoveries or an average resource size of new discoveries in Southeast Asia reflects a very similar field size as in the portfolio of Independents globally
— Resource size of the most M&A opportunities
— Increasing gap in domestic supply-demand
— Recent fiscal changes and ongoing discussions on additional incentives
— Partnership opportunity regional players, especially given improved cashflows in the last couple of years