Criterium Energy, an independent upstream energy development and production company focused in Southeast Asia, has signed a binding Sale and Purchase Agreement (“SPA”) for the arm’s length divestment of its wholly owned subsidiary which holds a 42.5% non-operated working interest in the Bulu Production Sharing Contract, offshore Indonesia. The total consideration for the Transaction is US$7,750,000 (C$10,500,000).

Transaction Update

Consideration for the Transaction will be paid as follows:

• a US$500,000 non-refundable signing payment, received by Criterium prior to signing the SPA;
• an additional non-refundable deposit of US$1,500,000 payable prior to closing the Transaction; and
• a US$5,750,000 payment due upon closing of the Transaction, which is expected on or before August 31, 2024. 

Positive Impact of the Transaction for Criterium Energy

The successful monetization of the Bulu PSC will demonstrate Criterium’s ability to identify and then transact on an undercapitalized asset, delivering value to Criterium's shareholders by introducing innovative development concepts and collaborating with industry partners and local companies. Streamlining the Company’s portfolio through this Transaction will result in a non-dilutive capital injection that can be redeployed into higher impact projects, while at the same time strengthening Criterium’s financial position.

Closing of the Transaction is expected to result in:

• an increase in cash of US$7,750,000, equivalent to C$0.08/share(1);
• a forecasted 2024 year-end Net Debt of approximately US$15 (down from approximately US$23 million at closing of the Mont D’Or Petroleum acquisition in Q1 2024); and
• the ability to accelerate development activities in Criterium’s core operating areas, namely the Tungkal and West Salawati production sharing contracts, thereby prioritizing investment into short cycle return opportunities as a mechanism to fund further material production growth.

Conditions to Closing

Closing of the Transaction is contingent upon the purchaser's ability to secure the necessary financing. Additionally, the SPA contains minimal other typical conditions precedent for a transaction of this nature, including regulatory approvals and notifications that are required in connection with the change in ownership of the Company's wholly owned subsidiary and the indirect change of control of the Bulu PSC.

(1) Calculated based on current shares outstanding as of May 17, 2024 and USD/CAD exchange rate of 0.734

KeyFacts Energy: Criterium Energy Indonesia country profile   l   KeyFacts Energy: Acquisitions & Mergers