Interra Resources

Interra Resources: is acquiring Indonesian firm PT Benakat Barat Petroleum (BBP), which holds all the rights to explore and develop the Benakat Barat field in South Sumatra, for US$78.5m – its largest acquisition so far. Such a move could raise Interra’s reserves by 80% from the current 25m bbls. The transaction will be 80% paid for with cash, financed through bank borrowings; the remaining 20% will be funded by new shares issued at $0.4591, close to the $0.46 close yday. Upon completion, the consideration shares will represent ~8.91% of the enlarged share base. The Benakat Barat field is adjacent to the Tanjung Miring Timur (TMT) field, in which Interra holds full participating interest, and produces oil from the same geological structures and formations as the latter. The contract to develop the Benakat Barat field was assigned in 2009 for 15 years. Post-acquisition, Interra's NTA/sh will rise from 15.904 US cents to 23.526 US cents, while EPS will drop from 0.762 US cent to negative 0.139 US cent. Interra will also be geared at 0.73x.