Andalas Energy and Power Plc Update on Tuba Obi East

 
TIDMADL 
 
25 April 2017 
 
                         Andalas Energy and Power Plc 
 
                         ('Andalas' or the 'Company') 
 
                            Update on Tuba Obi East 
 
Andalas Energy and Power Plc, the AIM listed Indonesian focused energy Company 
(AIM: ADL), provides an update on the Tuba Obi East oil and gas concession 
('TOE') in the South Sumatran Basin. 
 
Tuba Obi East ("TOE") is one of a cluster of three gas fields identified by 
Andalas as suitable for development as an integrated wellhead independent power 
producer project ('IPP').  The other offsetting fields, which are operated by 
Pertamina, are known as Karang Makmur and Simpang Tuan.  Pertamina has 
indicated that following the expiry of the TOE technical assistance contract 
("TAC") that it will retain and develop TOE alongside the offset fields as a 
single integrated unit (the "MJ Cluster"). 
 
This is in line with the Company's cooperation agreement signed with Pertamina, 
Indonesia's national oil company, in September 2016, to develop wellhead IPPs 
utilising Pertamina's significant inventory of gas assets.  As part of this 
agreement, in December 2016, Andalas submitted its first 2 x 30 MW Wellhead IPP 
project development with Pertamina for government approval.  The Company can 
now advise that this first project envisages sourcing gas from fields included 
within the Pertamina owned MJ Cluster, which is now expanded to include the gas 
resources at TOE.  The advantages of Pertamina operating TOE are as follows: 
 
  * Pertamina will fund the upstream development at the MJ Cluster, which has 
    the potential to exceed $50million.  Andalas believes it can create more 
    value by concentrating its resources on progressing its Wellhead IPP 
    project and pipeline; 
 
  * Pertamina, as owner of the enlarged MJ Cluster, has the technical and 
    financial resources to fast track the development of this asset to match 
    Andalas' ambitions to use the gas to develop the MJ Cluster IPP project; 
  * The company's timetable and ability to meet its target of 250-500MW of 
    installed capacity is enhanced by this decision. 
 
Andalas CEO, David Whitby, said: "As our recent project submission and project 
inventory updates attest, our cooperation with Pertamina continues to 
strengthen, therefore rather than focus our resources on developing a single 
smaller gas to power project at TOE, we are focussed on continuing the momentum 
we have in developing a portfolio of at least five projects with Pertamina that 
each have the ability to add significant value. 
 
 "The inclusion of TOE in the MJ Cluster is a logical next step with the 
benefit of removing from Andalas the obligation to fund an upstream gas project 
that was not fundamental to our wellhead IPP strategy. At the same time with 
Pertamina now the operator, TOE is back in the hands of our partner who has the 
resources, technical capability and the desire to develop the broader MJ 
Cluster unit to supply Andalas' first wellhead IPP project." 
 
                                   **ENDS** 
 
For further information, please contact: 
 
David Whitby          Andalas Energy and Power Plc   Tel: [phone] 
 
Sarah Wharry          Cantor Fitzgerald Europe       Tel: [phone] 
Craig Francis         (Nominated Adviser and Joint 
                      Broker) 
 
 
Frank Buhagiar        St Brides Partners Limited     Tel: [phone] 
Susie Geliher 
 
 
 
END 
 

(END) Dow Jones Newswires

April 25, 2017 07:59 ET (11:59 GMT)