Mitra negotiates Vietnam farm-in, Stag oil field acquisition offshore Australia

Offshore staff

VANCOUVER, CanadaMitra Energy has agreed to acquire a 30% interest from INPEX subsidiary Teikoku Oil (Con Son) in the production-sharing contract for blocks 05-1b and 05-1c offshore southern Vietnam.

The total cash consideration is $14.3 million, with further potential payments of $15.7 million linked to the project sanction and delivery of first sales gas from the project.

Both blocks are 350 km (217 mi) offshore in the Nam Con Son basin in water depths of around 120 m (393 ft), and include two fully appraised gas and condensate discoveries, Dai Nguyet and Sao Vang, close to the Nam Con Son gas transportation pipeline and existing production facilities.

The discoveries, Mitra adds, are strategically located to supply gas to operating power generating complexes in the industrial area of southeast Vietnam.

Partners in the blocks are Idemitsu Oil and Gas and JX Nippon Oil & Gas Exploration, each with a 35% interest. 

Mitra says the acquisition will build on its existing U Minh and Nam Du gas discoveries in the Malay Tho Chu basin. 

A. Paul Blakeley, executive chairman, said: “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.”

Consultant ERC Equipoise will prepare an independent resource assessment of the Dai Nguyet and Sao Vang fields to complement Mitra’s internal review and evaluation of the reserves.

The proposed acquisition remains subject to a pre-emption right held by the existing partners and a statutory pre-emption right held by Petrovietnam under Vietnamese law.

Last month Mitra Energy signed an agreement with Quadrant Northwest and Santos Offshore to acquire a 100% interest in the Stag oil field, 60 km (37 mi) offshore Western Australia in 47 m (154 ft) of water the Carnarvon basin, for $10 million, plus further contingent payments.

Mitra will operate the field which has remaining reserves of around 10 MMbbl. Stag has been in production since 1998 and is currently producing roughly 3,750 b/d from 10 active wells.

The company has identified various cost reduction measures to bring down operating costs, and plans to drill one appraisal pilot and three infill producer wells in the West area in 2017 and up to three further wells in the East area in 2018.

Mitra may extend appraisal to the undrilled low-risk exploration area of Hart and Stag South.

08/22/2016

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