Andalas Energy and Power Plc: Bunga Mas Update

Source Press Release
Company Andalas Energy and Power plc 
Tags Corporate Deals, Deals, Upstream Activities
Date February 18, 2019

Andalas Energy and Power Plc provides the following update in relation to its proposed acquisition of an interest in the Bunga Mas production sharing contract (“PSC”) (announced 29 August 2018).

The long stop date for fulfilment of the conditions precedent to the sale and purchase agreement expired on Friday, 15 February,  and the parties have not extended it.  The vendor has advised Andalas that the government of Indonesia (“GOI”) has advised that it intends to issue a letter terminating the PSC during the week commencing today.  If, as is expected, the GOI issues the termination letter, Andalas will terminate the sale and purchase agreement.

As advised on 12 February 2019, the GOI asked the PSC contractors to deposit sums into an escrow account and lodge performance bonds as a condition of renewal of the PSC.  The escrow sum is understood to be approximately US$5.8 million and the contractors have not satisfied this request.  The directors have concluded that it would not be in the interests of the Company to seek to raise funds sufficient to fulfil these requirements.

As previously announced, to date Andalas has incurred direct costs of an estimated £200,000 of legal, professional and other direct costs in connection with Bunga Mas.

Andalas Energy & Power PLC CEO, Simon Gorringe, said: “We are disappointed by the recent developments at Bunga Mas. We could not ask shareholders for the funds to lock up US$6 million in addition to the capital required to develop the field. However, Andalas will only terminate the agreement when we know that the licence has been terminated by GOI.

“Colter is currently drilling, and we look forward to providing shareholders with further news in the coming weeks both on Colter and the Company’s interest in Badger.” 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR).  Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd