Alberta-based Criterium Energy is set to acquire Mont D’Or Petroleum Limited (MOPL), which has oil and gas assets in Indonesia, Criterium said in a press release.
MOPL has operating interests in two production sharing contracts (PSCs) in Tungkal, located in southern Sumatra, and West Salawati, located in southwestern Papua. The Tungkal PSC produces 1,030 barrels per day (bpd) and contains proven and probable reserves of 4.6 million barrels, while the West Salawati PSC produces 20 bpd and contains proven and probable reserves of 100,000 barrels per day, the statement said.
PSCs are contracts signed between a government and a resource extraction company about how much of the country’s extracted resources each will receive.
Upon closing the acquisition, Criterium will issue $1 million of its common stock to Tourmalet Holdings Ltd., a company owned by the founding partners of Southeast Asia-focused investment firm Provident Capital Partners. MOPL’s current shareholders, which include Tourmalet, will receive contingent payments at certain prices and production thresholds, according to the statement.
Criterium will also make a $7.9 million cash payment to MOPL that will be distributed to existing MOPL lenders, as well as issue common stock and/or convertible notes equivalent to $5.75 million to select MOPL lenders, according to the communicated Criterium will also provide working capital of approximately $8 million to MOPL.
The two assets have been valued at $58 million NPV101 after tax, and will collectively produce approximately 1,050 bpd, Criterium said. After optimization, the company expects production of 1,400 to 1,600 bpd from the fourth quarter of 2023 to the first quarter of 2024. By the end of fiscal year 2024, the company expects production to be 2,200 to 2,600 bpd, which would generate $25 million. EBITDA in 2024.
The assets contain 2C resources of 6.5 million barrels of oil equivalent (MMboe), including 20 billion cubic feet of natural gas. The total potential resources are estimated at 29 Mboe, according to the release.
The acquisition “will establish Criterium as an operator in Southeast Asia while providing immediate production and operating cash flow,” the company said. It aligns with the company’s strategy to “build a balanced portfolio of low-risk producing assets with tangible reinvestment opportunities in the form of production optimization, infill drilling and outlet developments,” according to the statement .
“Mont D’Or is a pivotal acquisition for Criterium and establishes our company as a reputable operator in Indonesia and Southeast Asia,” said Robin Auld, CEO of Criterium. “By acquiring MOPL, we are adding an experienced team that safely operates over 1,000 [bpd] which generates a stable and scalable cash flow base that we intend to grow rapidly. With the recently announced Tungkal PSC extension of 2042, we intend to run annual drilling programs to fully realize MOPL’s potential to deliver long-term sustainable production growth within cash flow.”
“We are confident that the Criterium team will build on MOPL’s strong reputation established from over 15 years of operations to achieve significant value creation,” said Gavin Caudle, Founding Partner of Provident Capital Partners. “We invest for the long term and as a shareholder in Criterium, we will support the team and drive them to build an industry-leading business to align with the other companies in our portfolio.”
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