Bandar Seri Begawan - Melbourne-Based AED Oil Ltd expects its deal with Nations Petroleum Co Ltd for an interest in Brunei's Block L oil exploration permit to be confirmed within a few weeks.

"The deal will be done a few weeks from now," Trevor Slater, AED company secretary and general manager of marketing, told The Brunei Times by phone.

AED recently signed a Letter of Intent (LoI) with Nations Petroleum to acquire 100 per cent of the latter's subsidiary, Nations Petroleum (SE Asia) Limited.

The subsidiary owns a 50 per cent operating interest in Brunei's Block L permit which covers about 2,200 square km both onshore and offshore.

The AED-Nations transaction is still subject to the approval by PetroleumBRUNEI which owns the rights to Brunei's Block L.

After signing the LoI, we are now moving towards documentation and various approvals," said Slater. "Currently, AED is discussing with all the involved parties regarding our acquiring of Block L."

Asked what attracted AED to invest in the Sultanate's oil sector, Slater said Brunei has the expertise and capabilities in terms of oil and gas.

He said the Melbourne-based oil and gas exploration company had been looking at a number of areas but chose Brunei because company officials felt it was a good country in which to conduct their business. "We are glad to be part of Brunei's oil and gas sector and we felt that it is a good fit for our small but energetic company," he said.
AED will be bringing in its own machinery but is still working out the details, he said, noting though that potential drilling areas had been identified through seismic surveys.

"In turn, this will create more opportunities for Bruneians as the drilling programme will require more manpower," Slater said.

AED is set to pay Nations $4.2 million cash and issue 24 million new AED shares, which, based on AED's current share price of A$0.57 values the deal at about $22 million. That leads to Nations holding 14.5 per cent of the Melbourne-based oil exploration upon the deal's completion.

The LoI provides an exclusivity period which allows for approvals to be granted and formal documentation to be completed and executed, which will lead to the acquisition of the issued capital in Nations' wholly owned subsidiary holding the Block L assets, a statement from AED said.

The Block L consortium is made up of Nations (50 per cent), Loon Brunei Ltd (40 per cent) and QAF Brunei (10 per cent).

Block L covers the whole of Brunei-Muara with some areas of Tutong and Temburong. -- Courtesy of The Brunei Times

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