Artist & Entertainment Group (ASX: AEM) has signed binding agreements to acquire PT Centrenergy, which has secured a 15 year Co-Operation Agreement for the producing Wailawi Oil and Gas Project in East Kalimantan.
This will give AEM the majority stake in Wailawi through the joint venture company that Centrenergy is forming with local government authority Perusda Benuo Taka, under the Agreement reached with Indonesian upstream oil and gas regulator BP Migas.
AEM will pay for the acquisition through an issue of shares to Centrenergy owner Union Pacific Trading Pty Ltd. Union Pacific will also receive AEM shares for facilitating the transaction.
The Wailawi Project was discovered in 1975 and brought into production in 1979 producing gas from just four wells, with peak production reaching 18 million cubic feet of gas per day in 1985.
An additional two more wells were drilled in 1986 with production continuing until 1999.
However the low gas and oil prices brought about by the Asian financial crisis of the late 1990s resulted in the project being placed on care and maintenance and it wasn’t until October 2005 that the field resumed production after Perusda reached a Production Service Agreement with BP Migas.
Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.