Artist & Entertainment Group (ASX: AEM) has taken another step towards acquiring a stake in the producing Wailawi Oil and Gas Project in Indonesia, giving it valuable cash flow.
The company is seeking to take up an interest in the project at Balikpapan in East Kalimantan by taking an assignment of rights from Union Pacific Trading Pty Ltd.
Drafting of a new production sharing agreement between Union Pacific’s subsidiary Perusda Benuo Taka and Indonesian upstream oil and gas regulator BP Migas is now nearing completion.
This will allow Perusda to receive a share of the net project earnings generated from the project on the condition that it meets its obligations under a production sharing contract and carry out further exploration activity in the area.
Artist will provide further updates on the progress of the acquisition of the Wallwai interest.
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.
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