Singapore-headquartered Jadestone Energy has secured approval from Malaysia's national oil company Petronas and satisfied all other required conditions to complete its acquisition of SapuraOMV Upstream’s Peninsular Malaysia assets.

The assets include a 70% operated interest in the PM 329 production sharing contract that hosts the East Piatu field, and a 60% operated stake in the PM 323 PSC, which contains the East Belumut, West Belumut and Chermingat fields.

The deal also includes SapuraOMV’s non-operated stakes in Petronas Carigali’s PM 318 and AAKBNLP PSCs.

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Jadestone earlier said it sees upside potential with the assets, believing there is scope to add incremental value in the near term through both reservoir optimisation and production enhancement activities across blocks PM 329 and PM 323.

Gas reinjection planned

The company intends to utilise gas reinjection for reservoir optimisation, while production enhancement will initially be focused on restoring idle wells and bringing them back on line.

Jadestone is also planning infill drilling at the East Belumut field, where it has identified potential for several campaigns over the next few years, while the East Piatu and West Belumut fields will be evaluated further.

Completing the transaction will entail Jadestone paying the headline consideration of US$9 million, with contingent payments of up to US$6 million dependent on certain oil price criteria being met.

“I am delighted to see that the conditions to complete this transaction are now satisfied, allowing us to conclude our acquisition of the Peninsular Malaysia assets in a very efficient way,” said Jadestone chief executive Paul Blakeley.

On completion, Jadestone’s coffers will immediately benefit from some 6000 barrels of oil equivalent per day of low operating cost production, on a net working interest basis, of which more than 90% is oil.

Adding these Malaysian assets to the company’s portfolio will increase by 34% its net reserves, adding 12.5 million barrels oil equivalent of net working interest proven and probable reserves as of the end of 2020.

National talent pool

“We now look forward to rebuilding our operating presence in-country, deepening key relationships and establishing a significant business, drawing on the deep pool of Malaysian national talent,” Blakely added.