The Lemang PSC includes the undeveloped, but fully appraised Akatara gas field. The field has a best estimate gross undeveloped wet gas in place of approximately 115 bscf, which, at 90% interest equates to unrisked 2C resources of 55.2 bscf sales gas, 2.2 mm bbls of condensate, and 5.8 mm boe of liquid petroleum gas1.
Jadestone intends to pursue a low-cost development of the field, including re-use of existing wells and infrastructure, and tying in to a nearby gas export pipeline within 17km. The Company anticipates incremental production of approximately 5.3 mboe/d, based on management’s estimated plateau gas production rate of 18.8 mmscf/d gas (gross), plus associated condensate and LPG, with a duration of six years.
Completion of the acquisition is conditional upon customary governmental consents to the assignment of the interest in the Lemang PSC to a wholly owned affiliate of the Company, the appointment of such affiliate as the operator under the Lemang joint operating agreement (“JOA”), as well as other consents under the JOA, as required, all on or before June 26, 2021.
The Company anticipates completing the acquisition in Q1 2021. In the interim period, the seller has given customary undertakings and subject to any consents, members of the Company’s team will be seconded to the project.
1 Based on an independent review of contingent resources by ERCE, an independent qualified reserves auditor, and prepared for the Company in June 2020 in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook (“COGEH”), assuming 90% interest. Based on 81% (assuming local government participation), total 2C Group resource is 15.5 mm boe. 2C resource volumes presented represent the sub-class Development Pending, as defined by COGEH, and are presented on an unrisked basis. The main contingencies are non-technical and include the finalisation of the gas sales agreement and project FID. ERCE estimates the chance of development at 90%.