(MENAFN - ProactiveInvestors - Australia) Lion Energy (ASX: LIO) is increasing its exposure to conventional and unconventional petroleum opportunities in Indonesia by entering into a non-binding term sheet to acquire the remaining shares of KRX Energy.
The company currently owns 30.77% in KRX as a result of a A1 million funding agreement reached in the middle of 2012.
KRX, a private unlisted company based in Singapore, has acquired a 35% non-operating interest in the South Block "A" production sharing contract in North Sumatra in return for paying 49% of the gross cash calls of US8 million made by the operator for current and future work.
South Block A has an extensive prospect and lead inventory with unrisked potential of 87 million to 475 million barrels of oil in the oil case and 370 billion to 2 trillion cubic feet of gas in the gas case.
KRX is also evaluating for two years certain onshore areas of Java, Kalimantan and Sumatra with two Indonesian focused companies.
Four applications for joint study areas have already been submitted to the Government of Indonesia covering a total area of more than 16,000 square kilometres in Sumatra, Indonesia.
These applications cover areas KRX identified as having the key parameters for hosting significant unconventional hydrocarbon resources.
The acquisition is conditional on Lion raising between 1 million and 3 million through a share placement.
KRX shareholders currently hold a 20.13% interest in Lion. This will increase to 45.58% on an undiluted basis if Lion raises the minimum 1 million.