GSS ENERGY has entered into an investment agreement for an oil and gas exploration project in Indonesia, diversifying from its current (and relatively predictable) business of extracting oil from old oilwells in Indonesia.
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GSS Energy says this is "a strategic geographic expansion" from its Central and East Java operations into Sumatra through the West Jambi block, which will enhance its overall growth potential.
GSS Energy will provide a US$5 million investment in Ramba Energy’s drilling operations at West Jambi block.
Ramba Energy, an SGX-listed company with oil and gas exploration and production in Indonesia, will drill two onshore wells in this block in the second half of this year.
Both GSS Energy and Ramba Energy are of similar market capitalisation -- S$123 million and S$169 million, respectively.
Wholly-owned subsidiary Ramba Energy West Jambi (REWJ) holds 100% of the working interest in the Operations Cooperation Agreement entered into between REWJ with PT Pertamina EP dated 13 June 2011 for a term of 20 years in respect of the West Jambi Oil and Gas Operating Area.
RISC Operations Pty Ltd, an international petroleum consultancy company, has reviewed 9 prospects and 8 lead wells at the West Jambi block and has identified approximately 426 million barrels of un-risked gross prospective potential oil equivalent (“mmboe”) and risked gross prospective oil potential of 83 mmboe.
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David Aditya Soeryadjaya, CEO of Ramba, said, “I believe that this investment is also a result of the recent improvement in the oil and gas industry, where recently Brent rallied to almost US$70/barrel, which is a 2015 high. This improving sentiment definitely benefits E&P companies such as Ramba.
"Additionally, as this is the third investment that the Group has received in the past month, it further demonstrates that regional investors are viewing our strategy and oil and gas portfolio favourably. Having raised around S$30 million in total funds, Ramba is well capitalised to continue in its oil and gas work programme in Indonesia. Finally, I would also like to highlight that I am glad that we can do this exploration collaboration with a fellow SGX listed company. This is an important milestone for both Ramba and GSS Energy, and hopefully there will be more in the future.”
