Ramba

Ramba: (S$0.205) MOU to farm out working interest in Lemang exploration block
Ramba entered a MOU with an undisclosed strategic investor to farm-out a 25% working interest in its Lemang production sharing contract, which 80.4%-owned PT Hexindo Gemilang Jaya holds a 51% working interest in.

The aggregate consideration for the deal is up to US$128.3m, consisting upfront cash of US$18.8m and the remaining in tranches upon achieving milestones, in exchange for oil in one of Ramba's two exploration assets.

The Lemang block is recently valued at US$193.6m based on the gross prospective recoverable resources.

An agreement is expected to be entered on or before 25 Sep.

To recap, just under five months ago, Ramba saw increasing number of interest from deep-pocketed investors, underscoring the stamp of confidence in the group's strategy to expand via acquisition and development of lower-risk, onshore assets.

The proposed deal is in line with management's previous guidance that its near term priority is to accelerate development of the Akatara-Selong cluster within the Lemang block with first production expected in late 2015 or 2016.

At the current price, Ramba is valued at 0.98x P/B, compared to its 5-year historical average of 2.4x.