WestSide Corporation Ltd has exited its Indonesian joint venture, enabling the Company to focus exclusively on its Meridian SeamGas and Bowen and Galilee Basin projects in Queensland.
Under an agreement terminating the Company’s Heads of Agreement with PT Bumi Resources TBK (Bumi) and its subsidiaries, WestSide has secured unencumbered ownership of the Schramm TXD 180 drill rig as settlement.
The rig was owned by Bumi which had provided WestSide with priority access to commission and use the rig in Australia until it was required in Indonesia.
WestSide Chief Executive Officer Dr Julie Beeby said the Company had agreements with Bumi and its subsidiaries PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia to jointly explore for Coal Seam Gas (CSG) in Indonesia.
“ However, confirmation of WestSide’s tenure and operatorship in these areas has not been forthcoming to enable us as the operator to progress from the Project Definition Study to an exploration campaign ,” Dr Beeby said.
“ The subsequent entry of new participants in the Production Sharing Contracts granted in 2009 and Coal mining operations, including State-owned energy company PT Pertamina, PT Energi Mega Persada and Tata, further diluted WestSide’s potential interests, complicated the joint ventures and prompted WestSide to reconsider the value of participating in a non-operating role.
“ Consequently, WestSide has agreed to a Deed of Settlement to terminate our Heads of Agreement and joint venture with Bumi and concentrate almost exclusively on opportunities in Australia and more particularly, those in Queensland .”
Dr Beeby said WestSide had invested some $2 million in the PT Seamgas Indonesia joint venture to date and had commissioned the rig which Bumi acquired in 2008 for US$4.2 million.
WestSide has been using the rig since October 2009 at Tilbrook, Mount Saint Martin and Paranui and at Pretty Plains for the Meridian SeamGas joint venture.
“ This decision removes the associated uncertainty over tenement ownership and rights in Indonesia and enables us to focus on our aggressive drilling campaign to increase both gas production and reserves at Meridian SeamGas, our other Bowen Basin projects and a new grassroots program in the Galilee Basin ,” Dr Beeby said.
“ Investing to increase certified 2P reserves within our producing gas field, where we have the added benefit of immediate gas sales, offers a superior and timelier return on shareholders’ funds than pursuing greenfield Indonesian prospects better suited to international energy majors .”
The Schramm TXD 180 rig is one of the largest dedicated CSG rigs in Australia and will be leased out at commercial rates when not required by WestSide.
The rig is ideal for drilling the horizontal wells required within the Meridian field. Indonesia’s largest coal miner, Bumi is a foundation shareholder in WestSide and continues to retain 22,289,885 shares in the Company or 8.8 per cent.
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Source: WestSide, August 4, 2011;