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Published in House and Home on Friday, December 18th 2009 at 6:40 GMT by Market Wire🞛 This publication is a summary or evaluation of another publication
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 18, 2009) - CBM Asia Development Corp. ("CBM Asia" or the "Company") (TSX VENTURE:TCF)(US:CBMDF)(FRANKFURT:IY2) is pleased to announce that it has closed its letter of intent (the "LOI") with, inter alia, Batavia Energy Inc. ("Batavia") to acquire, indirectly, 24% of South Sumatra Energy Inc. ("SSE"), a private company jointly owned by PT Ephindo and Batavia, which together with Jakarta-based operator PT Medco Energi Internasional Tbk ("Medco"), holds the production sharing contract (the "Sekayu PSC") for coalbed methane on the 58,349 hectare "Sekayu" block located in the South Sumatra Basin, Indonesia. Under the terms of the LOI, the Company has paid an upfront cash payment of US$730,000 and is required to fund US$3,243,500 in exploration expenditures on the Sekayu block over the next three years to earn an estimated 12% working interest in the Sekayu PSC. A second cash payment of US$350,000 (the "Second Installment") is payable on or before March 1, 2011 provided that the Company has the right, in its discretion, to prepay such payment on or before March 1, 2010 for a reduced amount of US$270,000. If the Company fails to make the Second Installment, its estimated working interest in the Sekayu PSC will be reduced from 12% to 11%. Under the terms of the LOI, the Company also has the sole and exclusive right to provide financing for up to an additional 24% interest in SSE representing the remaining estimated 12% working interest in the Sekayu PSC. Alan T. Charuk, the President and Chief Executive Officer of CBM, has been nominated for appointment as a director of SSE, which appointment should be effective within 30 days.
CBM Asia President and CEO Alan Charuk commented on the closing of the Sekayu interests, "This transaction demonstrates our commitment and ability to identify and acquire valuable coalbed methane assets in Asia."
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 has the right to earn an estimated 12% participating interest in a production sharing contract ("PSC") for CBM on a 58,349 hectare block located in the South Sumatra Basin where initial exploration drilling of a production test well commenced in the second half of 2009. The Company has committed to fund an initial US$3.25 million in exploration expenditures on the Sekayu PSC to prove reserves and submit a Plan of Development to the Government of Indonesia. The Company also has an 18% net working interest in a PSC for CBM on a 76,000 hectare block located in the Kutai Basin of East Kalimantan. As geotechnical lead, the Company is responsible for directing a US$5.6 million exploration and appraisal program to November 2011, to determine commercial feasibility of CBM production for the Kutai-West PSC and submit a Plan of Development. The Company has 40% net working interests in a second 56,500 hectare block also in the prolific Kutai Basin. 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). Between May 2008 and August 2009, 15 CBM PSCs were granted by the Government of Indonesia, representing exploration commitments of US$95.68 million over the next 3 years. The Company trades on the TSX Venture Exchange under the symbol "TCF".
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. Investors 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. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
Neither 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.