Arran Energy Acquires Horizon Oil's Papua New Guinea Business
Privately-held Australia E&P company Arran Energy Pty Ltd. has entered into an agreement with ASX-listed Horizon Oil Ltd. to acquire its Papua New Guinea subsidiary, which operates a portfolio onshore exploration and development blocks located in Western Province.
Under the terms of the deal, Arran Energy will acquire Horizon Oil (PNG Holdings) Ltd. for a total cash consideration of US$3.5 million, subject to closing adjustments.
In January, Arran Energy had entered into an agreement with Repsol SA to acquire its oil & gas business in Papua New Guinea through the acquisition of Repsol’s wholly-owned subsidiaries, Repsol Oil & Gas Niugini Pty Ltd. and Foreland Oil Ltd. The terms of the transaction had not been disclosed.
Horizon’s PNG assets includes a 30% interest in PDL 10 (Stanley field), 30% operated interest in PRL 21 (Elevala/Tingu and Ketu fields), a 30% operated interest in PRL 28 (Ubuntu gas field), a 40% interest in PRL 40 (Puk-Puk, Douglas, Weimang and Langia fields), a 95% operated interest in PPL 372, a 100% operated interest in PPL 373, and an 80% operated interest in PPL 574. The licenses cover a combined area of approximately 7,900 sq. km and hold 2C Contingent Resources of approximately 715 billion cubic feet of gas equivalent (Bcfe), of which 84% is gas.
Based in Newcastle, New South Wales, Arran Energy is focused on exploration and development activities in Papua New Guinea, and also provides oil & gas advisory and consulting services to clients in Australia.
“PNG has been a big part of the Horizon story for many years and the decision to sell was not taken lightly. While undoubtedly a substantial, good quality resource, our ability to realise value and PNG was becoming increasingly long dated and uncertain, as was highlighted by the impairment write-downs taken earlier in the year. Divestment of our PNG interests was carefully considered in the context of our overall corporate strategy and we are pleased to have agreed to terms with Arran Energy. The transaction will provide Horizon with an opportunity to reset and optimise its asset portfolio and focus its efforts on securing a significant growth asset,” said Chris Hodge, Horizon’s CEO.
The transaction is subject to customary closing conditions, including waiver or expiry of pre-emptive rights periods under certain joint venture operating agreements, and is expected to close in Q4-2020.