Interra Resources Reduces Offer for Benakat Oil Stake to $60m

Jakarta. Interra Resources, a Singapore-listed oil and gas company, lowered its offer on the company’s planned acquisition of Benakat Oil to $60 million, following a recent report that indicated lower proven oil reserves for Benakat.

Interra is a unit of Saratoga Investama Sedaya, a company co-founded by Indonesian businessman Sandiaga Uno.

“The revision to the purchase price was arrived at after considering the results of the qualified person’s report and the economic evaluation report on the West Benakat KSO prepared by Gaffney Cline & Associates dated 21 August 2014,” said Marcel Tjia, chief executive of Interra, in a statement published on the company’s website on Saturday.

The report by Gaffney Cline & Associates, a British petroleum consulting company, estimated that there are some 8.18 million stock tank barrels of proven gross reserves in the Benakat Barat Block as of March this year — a 60 percent decrease from GCA’s previous report of the block in September 2013.

In the last deal in September, Interra had signed a sales purchase agreement to acquire all of oil and gas company Benakat Oil for $78.5 million, seeking to indirectly own its Benakat Barat oil production field in South Sumatra.

Benakat Oil, a unit of listed energy company Benakat Integra, holds 94 percent of Indelberg Indonesia, the controlling stakeholder at Benakat Barat Petroleum. Interra is also acquiring the entire stake of Bintang Sukses Internasional to take over the remaining 5 percent of Indelberg.

Under the latest sales purchase agreement, Interra stated that it will pay $54 million in cash, of which $10 million will be held in an escrow account awaiting any other adjustments in the purchase price.

The remaining $6 million will be paid off with the issuance of about 17 million shares in Interra, equivalent to 3.61 percent of its equity.

Benakat Oil has not made any statement regarding the revised sales purchase agreement at the time of writing.

Officials at Benakat Oil in Jakarta were not available to comment.

Interra is controlled by Indonesian businessmen Edwin Soeryadjaya and Sandiaga through investment firm, Saratoga Investama Sedaya.

The oil and gas company recently bought 641.08 million shares, or 50 percent, of granite miner Mitra Investindo at Rp 147.45 billion ($13 million), raising its ownership in Mitra to 52.46 percent.