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Lion Energy’s stake in the biggest gas discovery in 25 years

For oil and gas companies, it’s little wonder why the Seram Basin in Eastern Indonesia is one of the most desirable places for exploration.
For oil and gas companies, it’s little wonder why the Seram Basin in Eastern Indonesia is one of the most desirable places for exploration. Despite being surrounded by some of the most prospective hydrocarbon basins in the region, the Seram Basin in Eastern Indonesia has only had 9 exploration wells drilled. Of these, 6 led to discoveries. Lion Energy (ASX: LIO) is a small Australian oil and gas company that is undertaking a series of pre-exploration drilling activities in the highly prospective, yet under explored Seram Island area. Lion has a 60% stake in the East Seram PSC and a 2.5% stake in Seram Non-Bula PSC.   
“We had a discovery on the Seram Non-Bula block which is the largest on-shore gas discovery in the last 25 years,” said Tom Soulsby, Lion’s Executive Chairman, when he spoke on Reach Markets’ ‘The Insider’.
  “We now have all the exploration lookalikes of this large discovery in our block,” added Tom.  This asset caught the attention of the National Oil Company of Taiwan who bought out 40% of Lion’s stake in 2019. “They’re funding 80% of our costs for only a 40% stake. Another way of looking at it is that Lion gets 60% of the benefits but we only fund 20% of the costs. That’s how good the block is from the Taiwanese perspective,” explained Tom. The Seram opportunity is in a fold belt play, a type of geological formation which hosts 25% of discovered reserves around the world.  According to Tom, the Seram Basin features many similarities with the Zagros fold belt play in the Middle East, one of the most famous of its kind.  
“Our exploration team is seeing similar characteristics with the timing of the formations, the rock types, and the age of the rocks,” said Tom.
  Although Indonesia was once seen as a challenging operational environment for the oil and gas industry, things have changed. “The operating environment in Indonesia is now world class. The fiscal regime is extremely good. Our pre-tax take is something like 90% to the contractor.” said Tom.   
“We see yet-to-be-discovered opportunities in the billion and a half barrel range which is very material,” concluded Tom.
  Tom Soulsby recently joined us for our fortnightly webcast ‘The Insider: Meet the CEOs’. This article summarises some of the information he shared with us during the session. You can watch a full recording below, or you can click here to book into our next session. ‘The Insider’ is a great way to hear directly from the CEOs of fast growing Australian businesses. You will get valuable insights to their industries and companies future prospects.   The Insider: Meet the CEOs – Event Details: Date: Wednesday, 28th April Time: 12pm AEST Format: Online, 3 x 15 minute presentations This is a free event. Click here to book your spot. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position. Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.  The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss. Past performance is not a reliable indicator of future performance    

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