NZOG/Cue Energy Farm in to Central Petroleum's Amadeus Basin Assets
NZX-listed New Zealand Oil and Gas Ltd. (NZOG) and ASX-listed Cue Energy Resources Ltd., along with certain wholly-owned subsidiaries, have entered into a binding agreement with Central Petroleum Ltd. to acquire a 50% non-operated interest in its Amadeus basin producing assets in Australia, for total consideration of approximately A$85 million. The assets acquired include a 25% interest in the Mereenie oil & gas fields, and a 50% interest in the Palm Valley and Dingo gas fields each. NZOG will hold 70% of the acquired interests in assets, and the remaining 30% will be held by Cue Energy.
The total consideration of A$85 million is comprised of an initial cash consideration of A$29 million, an additional payment of approximately A$35 million by way of carry funding of Central’s share of near-term development, appraisal and exploration activities, A$21 million through an assumption of Central’s obligations by the NZOG entities to supply up to 4.9 petajoules (PJ) of gas (50% share) which has previously been paid for but not delivered under pre-sale or ‘take-or-pay’ arrangements, and a complete adjustment for net cash flows generated between the effective date and the completion date of the transaction.
The Mereenie oil & gas field (Permits OL 4 and OL 5) covers an area of 281 sq. km located onshore in the Amadeus basin in the Northern Territory. The field is operated by Central Petroleum in a joint venture with Macquarie Group Ltd., and contains six wells drilled on the flank of the Mereenie anticline. The Palm Valley gas field (Permit OL 3) covers an area of 639 sq. km, and currently has four producing wells, and five wells used for pressure monitoring. The Dingo gas field (Permit L7) covers an area of 468 sq km, and currently contains four wells including Dingo 4 being drilled into the water leg.
As of July 30, 2020, the fields have combined gross proved (1P) reserves of approximately 10.1 million barrels of oil equivalent (MMboe), proved + probable (2P) reserves of approximately 12.8 MMboe, and 2C contingent resources of around 30.6 MMboe.
Wellington-based NZOG is primarily focused on its producing interests in the offshore Taranaki basin in New Zealand. It also holds additional interests in exploration and development assets in Indonesia and Australia. In July 2019, NZOG’s majority shareholder, the Ofer Global Group, entered into a scheme implementation agreement to acquire the remaining ~30% of the company that it did not already own. NZOG also owns a controlling ~50.01% stake in Cue Energy, which is engaged in exploration and production operations in Australia, Indonesia and New Zealand.
ASX-listed Central Petroleum is focused on the production and sale of natural gas in Australia, and currently holds interests in a portfolio of E&P licenses across the Amadeus basin in the Northern Territory.
The transaction is subject to customary closing conditions including shareholder approval, and is expected to complete in Q3-2021.