CBM Asia Development Corp. (Toronto Venture: TCF) provides an update of its coalbed methane (CBM) exploration activities in Indonesia.
On December 12 CBM Asia signed a USD30 million loan with warrant MoU funding package with a prominent European family office which included a USD15 million letter of credit facility required by ExxonMobil under the Barito Basin farm-in umbrella agreement. The MoU was presented to ExxonMobil on December 13. However, CBM Asia was advised by ExxonMobil on December 16 that it planned to exit the Indonesian CBM industry.
CBM Asia is reviewing a draft termination agreement offered by ExxonMobil. The company has requested compensation for the extensive planning and technical support the company has provided to ExxonMobil to help it fulfill its PSC obligations during the past 18 months.
Separately, the company signed a letter of intent with an Indonesian oil and gas company to negotiate a JV/farm-in deal on four coalbed methane PSC's in South Kalimantan. The company continues to work with the European family office to arrange a funding package to support any agreement entered into.
CBM Asia retains various interests in five other awarded PSC's in Indonesia which were not covered by the Umbrella Agreement with ExxonMobil. These include the Sekayu and Kutai West PSCs where the Company holds an estimated 981 Bcf of unrisked recoverable prospective resources net to the company based on the results of eight CBM test wells. Production testing recently commenced at the KW-003 well at Kutai West; the company plans to disclose results when they become available.
The company also provides further details of the arbitration award decided against it related to the Kutai 2 PSC application. The Arbitral Tribunal in Singapore has ordered the company to pay legal and arbitration expenses totaling approximately USD1.39 million to respondent PT Ephindo.
CBM Asia is based in Vancouver, British Columbia
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