Lion Energy Sells Seram Non-Bula Stake to Fund East Seram Drilling Plans
Lion Energy has agreed to sell its minority interest in the Seram Non-Bula PSC for US$1.2 million, refocusing its efforts on the higher-potential East Seram PSC exploration program.
- Sale of 2.5% minority interest in Seram Non-Bula PSC for US$1.2 million
- Removes exposure to near-term negative cash flow from commitment work program
- Proceeds to fund drilling of Bula Karang oil prospect in East Seram PSC
- Transaction subject to Indonesian government approval, expected to complete in Q4 2025
- Lion retains exposure to Lofin gas discovery through East Seram PSC
Strategic Divestment to Streamline Portfolio
Lion Energy Limited (ASX – LIO) has announced the sale of its 2.5% indirect interest in the Seram Non-Bula Production Sharing Contract (PSC) in Indonesia for approximately US$1.2 million. The buyer, Singapore-based Vista Energy, will acquire the stake subject to Indonesian government approval, with the transaction expected to close in the fourth quarter of 2025.
This divestment follows a strategic portfolio review completed earlier this year, where Lion’s board concluded that the Seram Non-Bula interest had diminished in materiality. Production at the asset has declined to around 19 barrels of oil equivalent per day, nearing breakeven levels, while the development of the Lofin gas field remains uncertain and slow-moving. By exiting this minority position, Lion removes its exposure to a commitment work program forecasted to generate negative cash flow in the near to mid-term.
Refocusing on East Seram’s High-Impact Potential
Proceeds from the sale will be reinvested into Lion’s more promising East Seram PSC, where the company holds a 60% interest. Lion’s oil and gas division is actively advancing farm-out discussions to support the drilling of the Bula Karang oil prospect, an 11.8 million barrel target that represents a significant exploration opportunity. The sale proceeds will assist in funding Lion’s share of the upcoming drilling campaign, signaling a clear shift towards assets with higher risk-reward profiles.
Chairman Tom Soulsby emphasized the rationale behind the move, noting that East Seram offers better materiality and upside potential compared to the diminishing returns from Seram Non-Bula. While the company retains some exposure to the Lofin gas discovery through interpreted extensions into East Seram, the focus is now firmly on unlocking value from the Bula Karang prospect.
Transaction Details and Market Implications
The sale agreement includes an upfront deposit of US$600,000, already received by Lion, with the balance payable upon completion. The buyer, Vista Energy, is an investment firm with interests in logistics and energy sectors across Southeast Asia, suggesting a strategic fit for the asset.
For Lion, this transaction not only streamlines its portfolio but also improves near-term cash flow by shedding an asset with limited upside and ongoing capital commitments. It also aligns with the company’s broader strategy to develop Southeast Queensland’s first commercial-scale green hydrogen hub, indicating a diversified approach to energy markets.
Investors will be watching closely for updates on the East Seram drilling plans and funding arrangements, which could be pivotal in defining Lion’s growth trajectory over the coming years.
Bottom Line?
Lion’s divestment clears the path for a sharper focus on East Seram’s exploration upside, setting the stage for potentially transformative drilling results.
Questions in the middle?
- Will Lion secure farm-out partners to fully fund the Bula Karang drilling campaign?
- How soon can drilling commence following Indonesian government approval?
- What are the potential commercial implications if the Lofin gas discovery extends into East Seram?
