Vancouver, 9th August 2016: Mitra Energy Inc. (MTE) is pleased to announce that Mitra Energy (Vietnam 05-1) Pte Ltd (“Mitra 05-1”), a wholly-owned subsidiary of Mitra, as buyer, and Mitra, as guarantor, have signed a definitive Sale & Purchase Agreement (“SPA”) with Teikoku Oil (Con Son) Co., Ltd (“Teikoku”), a wholly-owned subsidiary of Inpex Corporation, as seller, for the acquisition (the “Block 05-1 Acquisition”) of a 30% working interest in the Blocks 05-1b and 05-1c Production Sharing Contract (“Block 05-1 PSC”) for a total cash consideration of US$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. 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 Co. Ltd. (“Idemitsu”) and JX Nippon Oil & Gas Exploration Corporation each with a 35% working interest.
The proposed Block 05-1 Acquisition is consistent with New Mitra’s strategy to acquire near-term development projects with low-risk upside potential. The Block 05-1 Acquisition will further strengthen Mitra’s position in Vietnam and 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.
The acquisition plays to our deep knowledge of the Vietnam gas market and extensive experience of operating in this highly prolific hydrocarbon basin. We look forward to working with Idemitsu to share our experience and thereby providing greater certainty towards delivering optimal outcomes for the project for the benefit of all stakeholders, including the Government of Vietnam.”
Pursuant to the terms of the SPA, Mitra will be required to pay US$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 US$9.8 million and US$5.9 million, respectively.
ERC Equipoise Limited 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. Final reserve volumes will be disclosed in a subsequent announcement upon completion of this report.
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. 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.
