CBM Asia Development Corp. (CBM Asia or the Company), announces that it is in negotiations with ExxonMobil to farm into three existing coalbed methane production sharing contracts (PSC) in the Barito Basin, South Kalimantan, Indonesia and acquire rights to farm into certain additional PSCs in the Kutai Basin, East Kalimantan. CBM Asia and ExxonMobil would hold equal ownership interest in each PSC.
The final terms and conditions of the proposed farm-in remain subject to the negotiation and execution of formal agreements between ExxonMobil and CBM Asia, as well as, among other conditions, government approvals.
Barito Basin. CBMA will acquire a 35% to 37.5% participating interests in three existing PSCs in the Barito Basin, South Kalimantan, Indonesia. Furthermore, CBM Asia will have rights to acquire 35% in one additional PSC in which ExxonMobil may acquire an interest. CBM Asia and ExxonMobil plan to carry out certain pilot well test programs, and CBM Asia will fund certain operating costs associated with the PSCs.
Kutai Basin. In addition, CBM Asia will acquire the right to farm into 50% of ExxonMobil’s future participating interest in certain coalbed methane PSCs in which ExxonMobil may acquire an interest located in the Kutai Basin, East Kalimantan. Subject to, among other things, government approval, upon ExxonMobil acquiring its participating interest in one or more of such existing and potential PSCs, ExxonMobil will farm out/assign 50% of its participating interest to CBM Asia.
“The Barito Basin holds approximately 100 Tcf of in-place1 CBM resources based on industry estimates” states CBM Asia Chairman Scott Stevens. “CBM Asia’s technical team has been reviewing the technical data since May 2012 and consider the Barito Basin to be one of the world’s best undeveloped CBM basins.”
“CBM Asia’s management team is excited by the opportunity to work with ExxonMobil,” states CBM Asia President and CEO Alan T. Charuk. “We have been in detailed discussions with ExxonMobil for several months and jointly aim for more efficient and effective development programs. Upon closing, the Barito Basin PSC’s farm-ins and the potential Kutai Basin PSCs will result in a material increase in our Indonesian acreage position and potential recoverable resource. We are close to finalizing our 2012 agenda of adding material low-cost acreage to our portfolio and look forward to our 2013 exploration and pilot production programs.”