Japanese LNG producer Inpex and Italy’s ENI will sell a 76 per cent stake in four undeveloped oil fields off Timor Leste to ASX-listed junior Finder Energy, for an up-front $US2 million fee.
Japanese LNG producer Inpex and Italy’s ENI will sell a 76 per cent stake in four undeveloped oil fields off Timor Leste to ASX-listed junior Finder Energy, for an up-front $US2 million fee.
Finder will make an initial $US2 million payment for the assets, with a further $US6.5 million payable if a final investment decision is reached, along with a five per cent production royalty.
The deal would make Finder – with a sub-$10 million market cap – the majority owner and operator of the fully appraised Kuda Tasi and Jahal fields, and two others.
The remaining 24 per cent is held by Timor’s state-owned national oil company Timor Gap.
Combined, Kuda Tasi and Jahal have estimated 2C contingent resources of 22 million barrels of oil.
The Krill and Squilla oil fields, which have been discovered but not appraised and are also part of the deal, have combined 2C contingent resources of 23 million barrels.
It hopes to tap the fields using a floating production storage and offloading vessel and three wells.
Finder will undertake a $6 million capital raise to fund the move, through a partially underwritten entitlement offer at 4.8c per share – an 18.6 per cent discount to the company’s August 6 closing price.
Major shareholder Longreach Investment Capital has agreed to take up a $3.2 million chunk of the raise – its full entitlement under the offer.
Finder already has projects in the Carnarvon Basin off the WA coast and the UK’s North Sea and said the addition of the Timor Leste fields would give it further low-risk geographical diversity.
The Timor Leste government is heavily economically dependent on the oil and gas sector.
The nation’s main earner was the Santos-operated Bayu Undan gas project, which is on its last legs and being looked at as a carbon capture and storage option.
The Woodside-led Greater Sunrise fields – majority owned by Timor Gap – are considered the nation’s great hope for its next generation of production but remain in limbo as a study is undertaken to consider whether gas should be delivered through Timor Leste or Darwin.
Woodside hopes to have that study completed by the end of the year.
With that project’s future unclear, Finder could be placed to become Timor Leste’s only source of energy revenue beyond Bayu Undan.
If it were to bring the Kuda Tasi and Jahal fields to production it would be delivering on a dream which was once Woodside’s – in the early 2000s the company sought to tap the fields through the Northern Endeavour FPSO.
Northern Endeavour produced from the Laminaria-Collarina oilfields straddling maritime borders between Timor Leste and Australia.
Towards the end of its producing life the Northern Endeavour was sold to junior energy play Northern Oil and Gas Australia, which was placed in liquidation in 2020 with no capacity to fund the vessel’s costly decommissioning.
The decommissioning responsibility has fallen on the Australian government, and is funded through a levy applied to offshore producers.
Finder’s shares were trading 8.4 per cent lower at 5.4c at 1.10pm today.
