Mitra buys stake in two blocks off Vietnam from Inpex
- Business & Finance
Mitra Energy has entered into an agreement with Inpex to buy 30% interest in Blocks 05-1b and 05-1c, located offshore Vietnam.
Mitra’s subsidiary Mitra Energy (Vietnam 05-1) Pte Ltd, as buyer, and Mitra, as guarantor, have signed a definitive sale & purchase agreement (SPA) with Teikoku Oil (Con Son) Co., Ltd, a wholly-owned subsidiary of Inpex Corporation, as seller, for the acquisition of a 30% working interest in the Blocks 05-1b and 05-1c Production Sharing Contract for a total cash consideration of $14.3 million subject to normal closing adjustments.
Blocks 05-1b and 05-1c are located 350 km offshore Vietnam in the Nam Con Son basin in water depths of around 120 meters. The Block 05-1 PSC holds two fully appraised gas and condensate discoveries, Dai Nguyet and Sao Vang, in close proximity to the Nam Con Son gas transportation pipeline and existing production facilities.
According to Mitra, these gas discoveries are strategically located to supply gas to operating power generating complexes in the industrial center of Southeast Vietnam. Partners in the blocks are Idemitsu Oil and Gas and JX Nippon Oil & Gas Exploration Corporation, each with a 35% working interest.
The Block 05-1 acquisition will add to Mitra’s existing U Minh and Nam Du gas discoveries in the Malay Tho Chu Basin.
A. Paul Blakeley, Executive Chairman of Mitra said, “This is a very important follow-on acquisition to the recently announced Stag Field deal in the Carnarvon basin. Having secured a solid operating platform at Stag, we now want to build out the portfolio with further highly accretive acquisition opportunities, in our target areas, which will deliver a strong and sustainable business in Asia Pacific.
“Block 05-1 holds significant appraised gas resource capable of being developed quickly and put onto production at high margins and with material value accretion within our portfolio. The sale of this gas into the power sector in Vietnam is a natural hedge in a low oil price world, and this project has a high likelihood of early approval being so well positioned, close to the Nam Con Son pipeline, to deliver gas to existing industrial consumers and for power generation.”
Pursuant to the terms of the agreement, Mitra will be required to pay $14.3 million on closing of the Block 05-1 acquisition and may also be responsible for certain contingent payments which are linked to the project sanction and the delivery of first sales gas from the project, in the amounts of $9.8 million and $5.9 million, respectively.
ERC Equipoise has been commissioned to prepare an independent resource assessment of the Dai Nguyet ad Sao Vang fields to complement Mitra’s internal review and evaluation of the reserves.
The proposed Block 05-1 acquisition is subject to a pre-emption right held by the existing partners under the Blocks 05-1b and 05-1c Joint Operating Agreement (to be exercised within 30 days of receipt of the signed SPA) and a statutory pre-emption right held by Petrovietnam under Vietnamese law. If the Block 05-1 partners or PetroVietnam were to pre-empt, they would be required to match the terms agreed by Mitra and Teikoku in the SPA.
Mitra noted that completion of the proposed Block 05-1 acquisition is conditional on obtaining all required approvals, including the approvals of the Government of Vietnam, the Vietnam Oil and Gas Group and partners.