ARCO Acquires 25% Interest in Malaysian Natural Gas Project

Los Angeles-based ARCO has successfully closed a transaction with Triton Energy Limited to acquire a 25% interest in a major natural gas project in the Malaysia-Thailand Joint Development Area (JDA) in the Gulf of Thailand. This acquisition was a result of an agreement between ARCO and Triton, where ARCO acquired 50% of a subsidiary holding Triton's interest in the JDA. With ARCO and Triton each holding a 25% interest, the remaining 50% is owned by the Malaysian national oil company Petronas. The estimated gross resources of the project exceed 10 trillion cubic feet equivalent.

Key Takeaways:

• ARCO has acquired a 25% interest in a natural gas project in the Malaysia-Thailand Joint Development Area (JDA) in the Gulf of Thailand.
• The project's estimated gross resources exceed 10 trillion cubic feet equivalent.
• ARCO paid Triton $150 million for the 25% interest in the JDA.
• ARCO will fund half of the JDA gas development costs, up to a maximum of $377 million.
• ARCO will make incentive payments of up to $65 million in 2002 and again in 2005 if specific development objectives are met.
• The JDA gas development costs will be recovered by ARCO once production commences.
• The acquisition is a result of an agreement between ARCO and Triton, where ARCO acquired 50% of a subsidiary holding Triton's interest in the JDA.
• The remaining 50% interest in the JDA is owned by the Malaysian national oil company Petronas.

Statistics:

• $150 million: The amount paid by ARCO to Triton for the 25% interest in the JDA.
• $377 million: The maximum amount ARCO will fund for the JDA gas development costs.
• $65 million: The maximum incentive payment ARCO will make in 2002 and again in 2005 if specific development objectives are met.
• 10 trillion cubic feet equivalent: The estimated gross resources of the natural gas project in the JDA.

Sources:

• PRNewswire, "ARCO Announces Closing of Transaction with Triton Energy Limited", August 3, 1998.
• ARCO Website, "Press Releases", August 3, 1998.
• Triton Energy Limited, " News Releases", August 3, 1998.