Cbm Asia Development (XE:A0RC22)
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5 Years : From Jun 2012 to Jun 2017
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%
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.
CBM Asia Development Corp.
President & CEO
(604) 684-2340 or (866) 504-4755
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