Sugih Energy's newly appointed finance director Rahman Akil said that $31 million of the facility would be used to finance the Lemang oil and gas block development of which it has 34 percent participating interest.

The development cost obligated to the company was $11 million post cash call for 2016 and $20 million future cash call for 2017.

(Read also: Sugih Energy severely hit by oil price slump)

"We will use the other $8 million to refinance corporate's debt and the remaining $2 million for corporate's cash," Rahman said during a press conference at the Indonesia Stock Exchange (IDX) building Jakarta on Monday.

The financing has a five year tenure with a three year extension option that will be paid by Sugih Energy's portion of the oil production in Lemang block.

The government approved the Lemang block exploration in 2007, and in November 2016, the production phase in Akatara field began with 300 barrels of oil per day (bopd).

"We plan to drill five more wells in Akatara field, increasing the production to 1,500 bopd at the end of the year," he said.

The lender, Mandala Funding (Caymans) Ltd is a subsidiary of Singaporean Mandala Energy Ltd, which also has participating interest in Lemang Block.

The block is owned by three companies, PT Sugih Energy Tbk through Eastwin Global Investments Ltd with 34 percent shares, Ramba Energy Ltd through PT Hexindo Gemilang Jaya with 35 percent shares, and Mandala Energy Ltd with 31 percent shares. (bbn)

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