Hashim Djojohadikusumo sells Nations Energy to Vagit Alekperov

Hashim Djojohadikusumo is an Indonesian , a very rich Indonesian and is the chairman and president of Nations Energy Ltd (www.nationsenergyltd.com).Nations Energy Co Ltd, was founded in 1996 as a private Canadian company to pursue international oil and gas exploration and production projects.

Lukoil who recently made their largest purchase ever, a Canadaian company, Nelson Resources Limited, which they acquired for $2 billion. It operates on the five fields located in the western part of Kazakhstan with the annual production of about 11 million barrels and recoverable reserves of 269 million barrels. This is the largest deal in LUKoil's history. Drilling of the first exploratory well has been conducted on the offshore site Sub-Karagan in the central part of the Kazakhstan sector of the Caspian Sea. On the neighbouring site, Kashsky, under completion is preparation of 2D seismic survey, electrical exploration and engineering and geological research prior to the drilling of the first exploratory well. Both projects are being implemented together with the national company KazMunayGas.

Vagit Alekperov told me over the gaming tables in Northern Cyprus that he has his eyes on Nations Energy – a price tag of $2.5Bn is attached. Expect news any day he said. LUKoils share on the LSE rise steadily every day. Fill ya boots.

Kazakhstan

JSC Karazhanbasmunai, a 94.6% owned subsidiary in Kazakhstan, on the eastern shore of the Caspian Sea, was purchased in 1997 where it has grown from an average of 4,900 bpd in 1999 to over 50,000 bpd at the end of 2004. Hashim's older brother Prabowo Subianto is the chairman of JSC Karazhanbasmunai. The Karazhanbas field was discovered in the 1970s and was in decline until Nations Energy acquired it in 1997 and drilled new wells, optimized, reactivated, or recompleted existing wells and added new production facilities. Production has grown from under 5,000 barrels per day in 1999 to average 41,000 barrels per day in 2005.Currently they are reported to have has 17 company-owned workover rigs and one drilling rig, with additional rigs and trucks being added to the fleet in 2005. The steam-generating capability in the field was doubled in the past 18 months with a full six steam-generating units in the field.

Azerbaijan

In 2003, Nations Energy started additional oil field activity in the western coast of the Caspian Sea in Azerbaijan. The fields in Azerbaijan offer a similar production growth opportunity as Kazakhstan. The Azerbaijan project area includes undeveloped lands which will allow for exploration over the near and mid-term. Production in 2005 averaged 5,150 barrels per day. In 2003 Nations Energy gained the right for exploration and development of the Mishovdag and Kelameddin oil fields and the block including the Padar prospect in the Azerbaijan Republic. In a little more than one year Nations Energy succeeded to change the existing opinion about these oil fields by increasing the daily production from 2800 barrels in 2003 up to 4150 barrels in August 2004. Nations Energy believes that Azerbaijani projects have a great potential and the company shall do its best to ensure their further development. Nations Energy is bound to the idea of economic development of the independent Azerbaijan Republic and shall cooperate actively for the good and prosperity of the Azerbaijani nation.

Karasu Operating Company (KAOC) is an Operating Company dealing with exploration and development of the Mishovdag and Kelameddin oil fields onshore Azerbaijan. From the beginning of the year 2003, when Nations Energy took over the operations, KAOC managed to significantly change the situation in the field. Thus, having stabilized the production at the end of 2003 KAOC ensured its gradual growth bringing it to 4150 barrels of oil per day in August of the current year. Today KAOC counts over 1000 local national specialists, 200 of which have been recruited during the last year.

Having received positive results from the pilot waterflood project in the Mishovdag field in the year 2003, KAOC commenced with the construction of facilities for a full-field waterflood program. The project is carried out on a high technological level pursuing the latest international standards practiced in the oil and gas industry. KAOC has finished the construction of a tank farm, pump station, electricity and water distribution network and is proceeding with installation of filters and other corresponding facilities at this time. The entire facility was inaugurated in November. The total estimated value of the project is approximately USD 9Mn. It is the biggest capital investment onshore in Azerbaijan for many years.

In 2004 KAOC began drilling exploration and development wells and by the end of October will have drilled 8 development wells with 6 of these being completed. Another 6 wells will be drilled and completed by the end of the year.

KAOC pays a peculiar attention to the environmental protection. In 2004 the company completed the implementation of a project on oiled soil clean up in Mishovdag. Another project on well sites development is in progress at present.


Nations Energy proven reserves in Khazakhstan and Azerbaijan exceeds 400 million barrels.

Indonesia

Continental Energy Corporation has announced that it and GeoPetro Resources Company have sold their interest in Continental - GeoPetro (Yapen) Ltd., holder of an interest in the Yapen Production Sharing Contract in West Papua, Indonesia, to Nations Energy Company Ltd. of Calgary, Alberta, Canada, for US$ 6,000,000 in cash.

Continental and GeoPetro are also partners in the Bengara-II Production Sharing Contract area in East Kalimantan, Indonesia, and have agreed to apply most of the funds from the Yapen sale to exploration and development drilling in Bengara-II. Continental owns 60% of the Bengara-II PSC.

Proceeds to Continental were US$ 3,600,000. No broker's or finder's fees were incurred on this transaction.



In January (Bloomberg)
there were reports (subsequently denied) that China National Overseas Oil Company (CNOOC) was about to buy Nations Energy Co Ltd at US$2 billion. Citigroup Inc was reportedly advising CNOOC for the transaction, while Credit Suisse First Boston (CSFB) was advising Nations Energy.

Further reports mentioned India's Oil and Natural Gas Company may enter the bidding for a $2 billion Kazakhstan oil producer sought by China's CNOOC Ltd as competition intensifies for energy reserves.

Nations Energy (its website reveals) had a profit of $80.5 million on sales of $339.6 million in the first nine months of 2004.

According to the latest financial statement , Nations Energy booked net profit after tax in 10 months of 2005 at US$179 million, which had jumped from only US$54.4 million in 2004. Net sales in 10 months 2005 were US$551 million.


Hashim is reported in Indonesia to be anxious to get some cash to sort out previous problems he had in Indonesia and buyback his, including the recently-started Tuban Petrochemical Complex and financing his brother's ailing PT Kiani Kertas through Merrill Lynch.