Magellan Petroleum said it has entered into a definitive agreement to sell the Palm Valley and Dingo gas fields to Central Petroleum through the sale of its wholly owned subsidiary Magellan Petroleum (N.T.) Pty. Ltd. In exchange, Central will pay to Magellan a total of AUD $35.0 million in cash and Central stock.
In addition, Magellan will receive bonuses from Central in the event that future gas sales revenues from Palm Valley exceed certain levels.
Central is a Brisbane, Australia based, ASX-listed junior exploration and production company that operates one of the largest holdings of prospective onshore acreage in Australia. Central’s acreage includes significant holdings in the Amadeus Basin that immediately surround Palm Valley and Dingo. Pursuant to the terms of the Sale Deed, the AUD $15.0 million of consideration in the form of Central stock will result in the issuance of approximately 39.5 million shares of Central on the Completion date, representing an approximate 11% pro forma ownership in Central’s common stock as of today’s date. In addition, Magellan will be entitled to appoint one Director to serve on Central’s Board of Directors.
Press Release, February 19, 2014