Dialog Group Bhd’s joint venture company has been awarded concession rights and operatorship for the L8/66 onshore oil and gas exploration block in Thailand.
The group said its 50.01%-owned joint venture company, Pan Orient Energy (Siam) Ltd (POES), was notified by the Thai government on Oct 5 that it had been awarded the concession following a joint bid with CanAsia Energy Corp under Thailand’s 25th Onshore Bid Round.
The development of Block L8/66 carries a minimum work commitment of US$14.3 million.
POES will serve as operator and hold a 70% participating interest, while CanAsia will hold the remaining 30% non-operating interest.
The award remains subject to the finalisation and execution of the concession agreement and fulfilment of the stipulated conditions precedent. Physical work is expected to begin once the agreement is signed.
Block L8/66 is located next to Dialog’s existing L53/48 producing onshore concession in Thailand, which is also operated through POES.
Dialog said the new block was previously part of the same concession area before being relinquished to the Thai government under concession terms requiring undeveloped acreage to be surrendered over time.
The proximity of L8/66 to L53/48, together with similar geological characteristics, is expected to provide operational synergies and give POES access to additional acreage surrounding existing producing fields.
POES is a joint venture between Dialog’s wholly-owned subsidiary Pan Orient Petroleum Pte Ltd, which owns 50.01%, and Sea Oil Energy Ltd, which holds the remaining 49.99%.
Dialog said the award supports its strategy of expanding across the upstream, midstream and downstream energy segments while building long-term recurring income.
The concession is not expected to have a material effect on Dialog’s earnings, net assets or gearing for the current financial year, but is expected to contribute positively to future earnings.
The award does not require shareholder approval.
