InterOil sold the companies that hold its Papua New Guinea oil refinery and petroleum products distribution businesses to Singapore-based Puma Energy Group Pte for US$525.6 million, which includes adjustments for cash and working capital.
InterOil’s downstream businesses include the Napa Napa refinery in Port Moresby that processes about 28,000 barrels a day, 52 service stations, and 30 fuel depots, terminals and aviation sites.
The sale ensures the transition to Puma Energy of all InterOil staff who are employed in the refinery and downstream businesses.
InterOil Chief Operating Officer Jon Ozturgut said the sale followed an unsolicited approach from Puma Energy and a strategic review by InterOil of options for the best allocation of capital.
InterOil’s Chief Financial Officer, Don Spector, said the banks’ response was pleasing, with expressions of interest well in excess of the final amount.
Jon Ozturgut, InterOil Corporation Chief Operating Officer, commented, “For the past 10 years, the refinery and distribution businesses have contributed to InterOil’s business model and Papua New Guinea’s development. However, our upstream and LNG business has become core to the company’s growth and, as a result of the success we have had in discovering and monetizing gas, the time is right to focus on this part of our business. The transaction immediately provides additional capital to fund our upstream and LNG business. We believe this is in the best interests of Papua New Guinea and our shareholders.”
Ozturgut said Puma Energy ensured that Papua New Guinea would have a world-class downstream business operator.
“We believe Puma Energy is the right company to take over, invest in and grow the downstream and refining businesses for the long-term benefit of Papua New Guinea” he said.
As a condition of the sale, Puma Energy may use the InterOil downstream brand for up to 12 months.
Puma Energy and InterOil will begin the handover of operations and transition of staff immediately.
Press Release, June 30, 2014