CBM Asia Increases Participating Interest in Sekayu PSC to 26%
May 25 2012 - 5:00PM
Marketwired
CBM Asia Development Corp. ("CBM Asia" or the "Company") (TSX
VENTURE:TCF)(US:CBMDF)(FRANKFURT:IY2). CBM Asia is pleased to
announce that it has entered into a settlement deed (the "Deed") to
increase its participating interest in the Sekayu production
sharing contract (the "Sekayu PSC") for the 583.49 km2 Sekayu block
in the South Sumatra Basin of Indonesia to 26%. Currently, the
Sekayu PSC is held 50% by a consortium of shareholders through
South Sumatra Energy Inc. ("SSE") and 50% by PT Medco CBM Sekayu,
as operator.
Under its original letter of intent, the Company acquired the
right to earn, indirectly through SSE, a 12% participating interest
in the Sekayu PSC (with the exclusive right to provide financing
for up to an additional 12% participating interest) from certain
arm's length vendors (the "Vendors") in consideration for
US$1,000,000 cash (the "Cash Payment"), of which US$730,000 was
paid on December 14, 2009, and exploration expenditures totaling
US$3,243,500.
Under the terms of the Deed, the Vendors have agreed to
relinquish and transfer all of their interest in SSE and the Sekayu
PSC to the remaining shareholders of SSE including the Company and
Ephindo Sekayu CBM Inc. ("Ephindo") in exchange for, inter alia,
the Company paying the Vendors the sum of C$75,000 in full and
final settlement of the Cash Payment and assuming all of the
Vendors' obligations under the underlying participation agreement
(the "Participation Agreement") between the Vendors and Ephindo.
Ephindo, in turn, will transfer all of its interest in SSE to the
Company in exchange for a direct 21.5% participating interest in
the Sekayu PSC. Upon completion of the transactions contemplated in
the Deed, the Sekayu PSC will be beneficially owned as follows:
CBM Asia (indirectly through SSE) - 26.0%
Ephindo - 21.5%
Far East Methane LLC ("FEM") - 2.5%
PT Medco CBM Sekayu - 50.0%
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TOTAL - 100.0%
Pursuant to the Participation Agreement, the Company will be
responsible for funding all of Ephindo's and FEM's exploration
expenditures under the Sekayu PSC up to the earn-in cap of
US$8,000,000 (the "Earn-in Cap"), of which US$6,422,938 had been
incurred by the Company and the Vendors as of December 22, 2011.
Upon the Company funding the remaining US$1,577,062 of the Earn-in
Cap, each party will be responsible for paying its pro rata share
of future exploration and other costs under the Sekayu PSC.
Certain transactions contemplated in the Deed including the
change in control of SSE to the Company and the transfer of the
direct interest in the Sekayu PSC to Ephindo are subject to the
approval of BP Migas, the Government of Indonesia's executive
agency for regulation of upstream oil and natural gas
activities.
FEM is a private limited liability company owned by Charles W.
Bloomquist and Harvey S. Price, both officers and/or directors of
the Company.
ABOUT CBM ASIA DEVELOPMENT CORP.
CBM Asia Development Corp. is a Canadian-based unconventional
gas company with significant coalbed methane ("CBM") exploration
and development opportunities in Indonesia. The Company holds
various participating interests in four production sharing
contracts (each a "PSC") for CBM in Indonesia. Indonesia has one of
the largest CBM resources in the world with a potential 453
trillion cubic feet in-place, more than double the country's
natural gas reserves (Stevens and Hadiyanto, 2004). Since 2008 a
total of 39 CBM PSCs have been granted by the Government of
Indonesia, representing exploration commitments of over US$100
million during the next 3 years. In addition to CBM Asia, other
companies active in CBM exploration in Indonesia include BP, Dart
Energy, ENI, ExxonMobil, Medco, Santos, and TOTAL. BP, ENI, and the
Indonesian government have confirmed that commercial CBM production
started in March 2011 from the Sanga-Sanga PSC and is being
exported from the Bontang LNG facility. The Company trades on the
TSX Venture Exchange under the symbol "TCF".www.cbmasia.ca
ON BEHALF OF CBM ASIA DEVELOPMENT CORP.
Alan T. Charuk, President & CEO
This news release contains forward-looking statements, which
relate to future events or future performance and reflect
management's current expectations and assumptions. Such
forward-looking statements reflect management's current beliefs and
are based on assumptions made by and information currently
available to the Company. Readers are cautioned that these forward
looking statements are neither promises nor guarantees, and are
subject to risks and uncertainties that may cause future results to
differ materially from those expected. All of the forward-looking
statements made in this news release are qualified by these
cautionary statements and those made in our Canadian continuous
disclosure filings available on SEDAR at www.sedar.com including
our annual MD&A dated April 26, 2012. These forward-looking
statements are made as of the date hereof and the Company does not
assume any obligation to update or revise them to reflect new
events or circumstances save as required under applicable
securities legislation. This news release does not constitute an
offer to sell securities and the Company is not soliciting an offer
to buy securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: CBM Asia Development Corp. Alan Charuk President &
CEO (604) 684-2340 or (866) 504-4755 (604) 684-2474
(FAX)corpcom@cbmasia.ca www.cbmasia.ca Micro Cap et al Investor
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