23rd Sep 2015 08:01
LONDON (Alliance News) - Hague and London Oil PLC saw its shares jump on Wednesday morning after it said it has entered a conditional deal to buy a stake in the Duyung production sharing contract in Indonesia.
The contract includes the undeveloped Mako natural gas discovery and nearby infrastructure, with an initial estimate of gas in place of 902 billion cubic feet gross. Hague said the deal will expand its southeast Asia portfolio, in line with its strategy, and said it will take an 85% working interest in the contract at a relatively low risk.
Hague added the project has healthy economics even within the current low commodity price environment.
Under the deal, in which Hague will acquire 85% from Singapore-based West Natuna Exploration Ltd, which will retain a 15% stake, Hague will invest USD500,000 in working capital and will acquire the long-lead items and contract services required to drill an appraisal well at the site.
"Duyung is a relatively low risk, low cost but high reward opportunity demonstrating robust indicative economics even within the current environment. It's a great addition to our portfolio and materially expands our presence within the new core area of Southeast Asia," said Andrew Cochran, Hague's chairman and interim chief executive.
Hague shares were up 55% on the news to 10.29 pence, the best performer in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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