Andalas acquires 25% interest in Indonesian oil project

Andalas Energy has acquired an interest in the Bunga Mas production sharing contract, located in South Sumatra, Indonesia.

The AIM-listed oil and gas company made an initial acquisition of a 25% interest in Bunga Mas on Wednesday via a corporate acquisition. The company also held the right to increase its interest to 49% and then 100%.

To satisfy the purchase, Andalas will issue 9.6m shares on completion of the acquisition of the initial participating interest - followed by an additional 9.6m shares on regulatory approval of its increase to 49%.

Bunga Mas, located within the Bunga Mawar field, has been assessed by the project's current operator to contain contingent resources of 220,000 barrels of oil.

Simon Gorringe, Andalas' chief executive said: "We are very pleased to have reached [an] agreement with the vendor for the acquisition of interests in the Bunga Mas PSC. It is an all share deal structured to align the interests of the vendor and our shareholders and ensure that consideration does not pass and additional costs are not incurred until the deal completes."

As of 0840 BST, Andalas shares had shot up 12.5% to 0.90p.