Seascape Energy, an E&P company focused on Southeast Asia, has announced the successful farm-out of a 42.5% participating interest in the Block 2A Production Sharing Contract to INPEX CORPORATION. Following completion of the Transaction, Seascape will retain a 10% participating interest in the PSC through its wholly owned subsidiary, Topaz Number One Limited ('TNOL').
Transaction Highlights
- Full, uncapped carry for Seascape's Retained Interest (10%) through the remaining exploration phase which includes one firm wildcat well and one contingent appraisal well (subject to a commercial discovery);
- A cash consideration of US$10 million payable in full at Transaction completion;
- A further contingent cash consideration of US$10 million payable on a commercial discovery;
- Reimbursement of certain historic costs associated with the PSC totalling ~US$0.5 million;
- Partnered with INPEX CORPORATION, Japan's largest exploration and production company, which is expected to take over as operator of the PSC with existing, synergistic operations in deepwater Sarawak
The Transaction is subject to partner and regulatory approvals and anticipated to complete at the end of Q1 2025.
Block 2A Highlights
Block 2A is located offshore Sarawak, eastern Malaysia in the North Luconia hydrocarbon province covering approx. 12,000 km2 in water depths between 100 -1,400 metres. Block 2A contains the world-class Kertang prospect, located across four Oligo-Miocene reservoirs, which is:
- Well-defined, large, four-way dip structural high with over 220 km2 of closure;
- Covered by high-quality, wide-beam 3D seismic shot by CGG in 2015;
- Exhibits direct hydrocarbon indicators (DHIs) including an overlying gas cloud feature and amplitude brights;
- CPR undertaken by ERCE on Kertang in 2024 assigns total gross, unrisked mean prospective resources of 9.1 TCF plus 146 mmbbl of NGLs (~1.7 billion boe);
- CPR chance of success of ~20%;
- Bintulu LNG, one of the world's largest LNG facilities, is located onshore Sarawak;
- Based on regional offset wells, third-party high-level cost estimates for a successful Kertang exploration well in excess of US$70 million (gross).
Following completion of the Transaction, Seascape will retain a material exposure to the Kertang prospect with net unrisked mean prospective resources of ~910 bcf and ~15 mmbbl of NGL (~166 mmboe). A summary of the CPR published in June 2024 can be found on the Company's website: https://seascape-energy.com/presentations-reports/.
Block 2A was originally awarded to Seascape Energy in February 2023 as part of the Malaysian Bid Round 2022 (MBR 2022) by PETRONAS Malaysia Petroleum Management ('MPM'). MPM acts on behalf of PETRONAS in the overall management of Malaysia's petroleum resources throughout the lifecycle of upstream oil and gas assets.
Nick Ingrassia, CEO of Seascape, commented:
'The successful farm-out of Block 2A marks an important turning point for Seascape Energy Asia following its strategic pivot in the middle of 2024. Attracting a high-quality partner into the world-class Kertang prospect, alongside the recent award of 12 gas discoveries in the DEWA PSC, highlights the vital role that nimble, forward thinking, independent E&P companies have to play in the Southeast Asian upstream ecosystem.
'The commercial terms of the transaction allow Seascape to retain material exposure to the significant upside associated with drilling the 9 TCF Kertang prospect at nil ongoing cost while also providing capital to be reinvested into the business - including bringing the DEWA cluster through to development.
'I am enormously proud of our team which has worked tirelessly over the past few months to deliver a transaction which not only secures Seascape's future - but also creates a platform for growth. We look forward to working with our new partner, INPEX CORPORATION, along with PETRONAS and Petros to bring the transaction to a successful completion during Q1 2025.'
Source: Seascape Energy Asia
