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Xstate Resources to update acquisition of Blue Sky Langsa

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Xstate Resources (ASX: XST) is preparing to update the acquisition of Blue Sky Langsa and an asset acquisition, with the ASX granting the company a trading halt this morning - with its shares placed in pre-open.

Last month Xstate 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.

The halt will last until the earlier of an announcement being made to the market, or the opening of trade on Wednesday 20th March 2013.

 

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Quick facts: Xstate Resources Limited

Price: 0.002 AUD

ASX:XST
Market: ASX
Market Cap: $2.85 m
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