AED upbeat over oil prospects in Brunei

MELBOURNE-BASED AED Oil Ltd is in the process of taking over local operations of Nations Petroleum and is upbeat over the prospects in Brunei's oil and gas sector.

AED now controls a 50 per cent operating interest in Block L through the takeover of the local unit of Canada's Nations Petroleum.

Being an Australian company, AED is "very pleased" to be in Brunei because of the good infrastructure and quality of resources available, AED Country Manager Trevor Slater told The Brunei Times.

"All of that makes it (Brunei) a very exciting place for us to venture into," he said.

"It's the same regime we have had under this company and our workforce currently comprises of our own staff and a number of local contractors with local employees.

"AED will also be using local suppliers and depending on our resources, we'll be under-taking contracts locally," he said.

When asked whether AED will be expanding its Brunei workforce, Slater said the company is still focusing on the current exploration work for Block L which the firm is undertaking with a number of contractors.

He said AED is not only looking at the current project, but is "very much looking toward the future".

"This is just the very first stage in what we hope will be a very long relationship with Brunei in the future," Slater said.

AED Oil Ltd in November agreed to buy Nations Petroleum (SE Asia) Limited.

AED previously announced it had signed a Letter of Intent with Nations Petroleum Co Ltd to acquire 100 per cent of Nations' wholly owned subsidiary.

Under the deal, AED will pay Nations US$3 million ($4.2 million) in cash and issue 24 million new AED shares, which values the deal at about A$16.9 million ($22 million) based on share price of A$0.57.

AED said Nations will end up with a 14.5 per cent holdings in the Melbourne-based oil exploration company at the deal's completion.

The other 50 per cent of the Brunei Block L, which covers about 2,200sq km both onshore and offshore, is owned by QAF Brunei (10 per cent) and Loon Brunei Ltd, which has been taken over by Kulczyk Oil Ventures, comprising the remaining 40 per cent.

Almost two years ago, Nations did a seismic survey costing US$20 million ($28 million) over a large portion of Block L which has identified several drill ready prospects.

Pedro De Souza, managing director of AED, said the firm is "very pleased" with the deal for Block L. "Having reviewed a range of business development opportunities, the company believes that the acquisition is consistent with its development and operating experience in the Puffin Field and should provide considerable potential upside in valuation."

He said AED is also evaluating Asian assets held by other Nations wholly owned subsidiaries and an exclusivity period has been agreed over these assets.

In January, AED said its share of costs for the drilling for Block L is expected to be at US$5 million to US$7.5 million per well.The Brunei Times