New Guinea Energy said that its unit Kirkland has signed an agreement with a subsidiary of Santos, Barracuda Limited, regarding the proposed sale of Kirkland’s 50% participating interest in Petroleum Prospecting Licence 269 (PPL269) to Santos for a maximum total consideration of up to US$40 million.
NGE Chief Executive Officer, Grant Worner commented: “This transaction is consistent with NGE’s strategy of monetising its gas assets so the Company can focus on oil exploration in Papua New Guinea. The sale of PPL277 in late 2012 has, and this sale of PPL269 will, provide material cash injections whilst allowing NGE to retain an interest in the potential upside of developing these assets.
“This upside is dependent on the success of experienced oil and gas companies in PNG through bonus payments on the grant of a PRL or PDL in respect of PPL269 and PPL277 and an uncapped royalty over any production from PPL277.
“When the sale of Kirkland’s interest in PPL269 completes, the US$32 million will significantly strengthen NGE’s balance sheet and provide capital to further progress our exploration opportunities.”
New Guinea Energyt has 5 onshore Petroleum Prospecting Licences (PPLs) covering more than 29,500km² (7 million acres) and a royalty right over another 8,000km² (2 million acres) in a PPL running parallel to the PNG LNG Project.
LNG World News Staff, February 14, 2014; Image: NGE