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Xstate Resources acquiring producing Sumatran offshore oil project

Xstate Resources acquiring producing Sumatran offshore oil project

Xstate Resources (ASX: XST) has signed a Memorandum of Understanding to acquire 100% of an offshore Sumatra, Indonesia, oil project that is currently producing profitably at a rate of about 340 barrels per day.

Production from the Langsa Technical Assistance Contract (TAC) currently comes from one well via a dedicated leased floating production, storage and offloading vessel.

Importantly, Langsa was originally developed with five other subsea wells that are currently shut-in and are candidates for workover to recover additional oil.

Plans are already advanced to complete the suspended H-3 well in the northern part of the H field that was drill be Mobil and which flowed oil at rates of over 3,500 barrels per day before it was suspended for future production.

Xstate expects that a successful workover program could allow the field to produce at an initial rate exceeding 3,000bpd of oil.

Cash flow from this increased production may be used for further exploration on Langsa and other projects that are under consideration.

MoU Details

Xstate is acquiring Blue Sky Langsa (BSL), which holds 100% of the Langsa TAC, by issuing 459.57 million new shares to BSL shareholders.

Following the transaction, BSL shareholders will own 82% of Xstate shares and will nominate two directors to Xstate’s board. BSL president Ilyas Chaudhary will be appointed Xstate’s chairman.

Value: The transaction is based on the following approximate valuations:
Xstate: - ASX listed entity with approximately $750,000 cash,
after Tunisia Sale proceeds are received:. $2 million
BSL: Langsa TAC 100% interest including reserves,
and $3 million equipment inventory: $9.1 million

Langsa

Langsa is located in 70 to 100 metres of water about 50 kilometres off north Sumatra. It contains the L and H oil fields and related oil field equipment inventory.

Production is sourced from limestone reservoir rocks about 1,600 metres below the sea surface.

Langsa is adjacent to other oil discoveries, providing Xstate with opportunities for growth.

 

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Xstate Resources Ltd Timeline

Newswire
February 15 2017
Newswire
August 31 2015

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October 05 2018
A comprehensive exploration program will commence upon transaction completion.

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