SBA PSC

Summary conditions of the South Block A PSC:

Type South Block A Project
KRX South Block A equity 40.7% (extra 5.7% obtained following withdrawal of POGI subject to Government approval)
Other participating interest holders RENCO Elang Energy Pte Ltd (59.3%)
Gross area 421 km2 split into 2 areas, Area 1 comprises 366 km2 and Area 2 comprises 55 km2.
Date of the PSC 5 May 2009
Government participation rights 10%
Initial Exploration Period 6 years comprising initial 3 year firm commitment followed by option to a further 3 year term.
First Additional Exploration Period 4 years
Relinquishments 80% before 4 December 2016 (to be reduced accordingly if a discovery over a surface area covering more than 20% of the original contract area is made). A 10% (210.5km2) early relinquishment proposal was approved on 17 December 2013 covering areas to the south east and also north west of Area 1. This reduced total Block Area to 1,894.5 km2. In 2015 a further relinquishment of 15% reduced the area to 1,580 km2. In January 2017 a final relinquishment was made on entering years 6-10 with area now 421 km2
Signature bonus US$1,050,000 (paid)
Equipment and/or service bonus US$50,000 (paid)
Work commitments for the first three contract years (being the firm commitment component of the exploration period) In 2013 (Contract Years 1 and 2):
  • US$1,530,000 (170 km of 2D seismic) - Completed
In 2014 (Contract Year 3):
  • US$250,000 (geological and geophysical studies) - Completed
  • US$3,000,000 (drill 1 well) - Completed
Indonesian regulator has granted the SBA PSC a 4-year extension to the exploration term, to 22 January 2021. The "non-firm" work program in the extension period comprises 3 wells and 50 km2 of seismic.  Progress will be reviewed by the regulator after 2 years.

Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery (geological chance of success or GCOS) and a chance of development (economic, regulatory, market and facility, corporate commitment or political risks). The chance of commerciality is the product of these two risk components. There is no certainty that any portion of the prospective resources will be discovered and, if discovered, there is no certainty that it will be developed or, if it is developed, there is no certainty as to either the timing of such development or whether it will be commercially viable to produce any portion of the resources.