CALGARY (Yosefardi) – MILL CITY GOLD CORP. has signed revised Letter of Intent (LOI) to purchase up to a 75% working interest in the North East Tanjung Block, an onshore Indonesian gas concession and Production Sharing Contract with a 30 year contract term including an initial 6 year exploration period.
The gas concession and OSC contract is owned by PT Trimata Energi Investama (PTTEI), an Indonesian company owning 85% of the shares of PT Anugerah Trimata Kaltim Energi (PTATKE), that holds a 100% working interest in the project.
The North East Tanjung Block project is located at Kutai Barat regency, East Kalimantan Province, which is approximately 180 km to the north-west of Balikpapan City. The project area covers approximately 5,453.27 square kilometres within the onshore Kutai Basin.
Geologically, the project area is situated in the Western Kutai Basin, known as the Upper Kutai Basin, which is one of the most prolific petroleum basins within Indonesia. Moreover, from a previous study on adjacent ground, the gas potential has been proven in the Mendung Well, within the onshore West Kutai.
To confirm the potential of the North East Tanjung Block, the parties plan to conduct exploration activities including drilling 2 exploration wells and 2 delineation wells, and to conduct a 2D seismic survey over a 2 km x 300 km area by the end of 2016. The estimated total cost to complete the exploration program is approximately US$32 million.
The LOI allows for up to ninety (90) days from the signing to complete due diligence and to arrange the required financing.
PTATKE is an Indonesian limited liability company engaged in oil and gas exploration and production business. PTATKE was established in 2012, exclusively for the purpose of the exploration and production activities of the North East Tanjung Block. Currently, PTATKE holds a 100% working interest in the North East Tanjung Block.
PTTEI is an Indonesian company owning 85% of the shares of PTATKE and controls an 85% working interest in the North East Tanjung Block.