Rift Basin enters into memorandum of understanding on Indonesian blocks
VANCOUVER -- Rift Basin Resources has entered into a memorandum of understanding with PT Sinergi to evaluate and redevelop an onshore multi-reservoir oil field, known as the Dandangilo and Beji Block. The block contains 110 existing wells within an 80-sq km area located in Bojonegoro, East Java, Indonesia.
PT Sinergi has the rights under a renewable 5-year cooperation agreement with KUD to produce oil from existing shut-in oil wells in the working area. Rift Basin will apply EOR techniques to the existing wells in order to bring them back into production. KUD is a district-level cooperative with the rights, under a petroleum production contract with Indonesian state oil company PT Pertamina, to lift and raise oil from relinquished and mature fields, and deliver to a point agreed to between the parties, as approved by the Ministry of Natural Resources. The field is currently producing approximately 1,500 bopd from six wells through KUD without the benefit of EOR technology.
Rift Basin has also entered into a memorandum of understanding with Portvest whereby Rift Basin and Portvest will jointly, through a newly established Indonesian foreign investment company, hold 70% of PT Sinergi, which in turn holds the rights to exploit the field. Portvest will be the operator and responsible for funding the initial service and enhancement work required to establish initial production cash flow and to attract a project lending facility.
The memoranda of understanding are not definitive, and there can be no assurance that any transaction in connection with the preliminary agreements will be completed.