TORONTO (Yosefardi) – TSX Venture-listed Pan Orient Energy Ltd recorded impairment charge of $13.3 million for exploration and evaluation assets of the South CPP block, onshore Sumatra, Indonesia.
Pan Orient owns 77% working interest in the production sharing contract. Capital expenditures were $4.5 million in the first half of 2013 with $4.2 million for the 227 kilometer 2D seismic program which was completed in May 2013 and $0.3 million for capitalized general and administrative expenses and other capital expenditures.
“After the evaluation of the seismic program results, the Company has decided to relinquish the South CPP PSC. As part of the relinquishment, it is expected that the company is required to pay the Government of Indonesia for unfulfilled firm commitments in the amount of $2.8 million,” Pan Orient said yesterday.
As a result of the intended relinquishment, Pan Orient is reducing the carrying value of the South CPP PSC exploration and evaluation assets to zero and the Company is recording an impairment charge of $13.3 million for the exploration and evaluation assets of the South CPP PSC as at June 30, 2013.
As for the East Jabung PSC, on-shore and offshore Sumatra (Pan Orient operator and 100% ownership), the 430 kilometer 2D seismic program is expected to be completed by year-end at a total cost of $5.5 million.