Mainboard-listed RH Petrogas which is engaged mainly in the business of exploration, development and production of oil and gas resources, says it has signed a sale and purchase agreement with PearlOil Holdings to acquire the entire issued share capital of PearlOil (Basin) (POB) and PearlOil (Island) (POI).

The aggregate purchase consideration for both POB and POI is US$36.7 million ($48.9 million).

Both POB and POI are wholly-owned subsidiaries of PearlOil. POB holds a 34.064% participating interest in the Kepala Burung Production Sharing Contract (the Basin PSC), while POI holds a 18.702% participating interest in the Salawati Kepala Burung Production Sharing Contract (the Island PSC).

The sale and purchase of both these participating interests is effective from 1 January 2010 , which is the date on which the economic ownership of both the interests is being transferred from PearlOil to RHP (subject to completion of the acquisition occurring).

The Basin PSC and the Island PSC are two contiguous blocks located in the “Birds Head” area of West Papua, Indonesia, occupying a total area of 2,000 sq km onshore and offshore. Both the PSCs currently expire in 2020.

Based on an independent preliminary assessment by Gaffney, Cline and Associates (GCA), the combined proved and probable (2P) oil reserves attributable to the acquired interests is 8.1 million barrels as of end-2009. Thus, including the interests in the two PSC’s recently agreed to be acquired from Lundin, the total combined 2P oil reserves attributable to RHP is estimated at 14.3 million barrels as of end-2009.

Current net oil production attributable to the acquired PearlOil’s interests is around 2,600 barrels per day. The total net production increases to around 4,700 barrels per day when combined with the net oil production attributable to the Lundin interests.