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Oil exploration minnow Andalas Energy and Power has signed off on a services agreement regarding its Betun and Selo fields in Indonesia.
The deal, which also includes an option to buy into future production at the assets, will also see Andalas issue a £2m unsecured, convertible loan to help fund work.
The Betun field in Sumatra, Indonesia currently produces 70 bopd. The work programme will be aimed at increasing production by an extra 80 bopd to a total of 150 bopd. The Selo is at an earlier stage in its development and is currently non-producing, but the company believes it has scope for up to 5 drilling locations in future.
'We are very excited by the Betun Selo KSO opportunity in Indonesia', said Simon Gorringe, chief executive of Andalas Energy and Power.
'This provides Andalas with the potential to earn direct access to oil production and revenues, which has always been one of our key objectives.'
At 8:54am: (LON:ADL) Andalas Energy Power PLC share price was -0.03p at 0.14p