Sumatec unit buys stake in Petro

Business Times, 11 May 2005

SUMATEC Resources Bhd said its sub-subsidiary, Sumatec Petroleum Development Sdn Bhd, is acquiring 65 per cent equity interest in PT Petro Java Energy

Sumatec Petroleum Development yesterday entered into a heads of agreement with PT Petro Java Energy, which is currently negotiating a 20-year joint operations contract for a marginal oil field in Eastern Java with Indonesian national oil company, PT Pertamina.

The field has a proven reserve of 95 million barrels of oil and a recoverable oil output of 24 million barrels based on a recovery factor of 25 per cent.

The field lies in a prolific oil basin with more than one dozen oil fields discovered and exploited.

The development cost for the field is forecasted to be low as the oil is found at only 300m to 500m below the surface.

Oil production is expected to be 5,000 barrels per day, Sumatec said in its filing to Bursa Malaysia Bhd.

“The board of directors of Sumatec is of the opinion that the business venture in PT Petro Java Energy is in the best interests of the company,” it said.

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