Petsec Energy Completes Divestiture of U.S. Upstream Assets
ASX-listed Petsec Energy Ltd. has signed a sale and purchase agreement to divest substantially all of its oil & gas assets in the United States. The unnamed buyer is a privately-held E&P company based in Houston. In April this year, Petsec had announced its strategic plan to wind up its U.S. operations so as to focus solely on its operations in Yemen.
Under the terms of the transaction, the buyer will acquire Petsec’s assets for a nominal amount plus the assumption of plugging and abandonment obligations. The divested assets include working interests in the Hummer, Mystic Bayou, and Jeanerette producing fields, which are located both onshore and offshore Louisiana. The fields hold combined 2P reserves of 2.8 million barrels of oil equivalent (MMboe) as of December 31st, 2019, of which approximately 65% is gas. Production associated with the assets was approximately 96,000 barrels of oil equivalent per day (boe/d) during Q1-2020.
“The low oil and natural gas price environment coupled with the demand on capital for reinvestment in the U.S. oil and gas assets requires that the company focus all its efforts on the monetisation of its significant assets in Yemen – the Damis (Block S-1) Production Licence and Al Barqa, Block 7 Exploration Permit, in which the company holds 100% and 75% participating interests, respectively. The primary focus going forward will be to continue to engage with potential joint venture partners and secure access to government owned facilities to restart production at Block S-1,” said Terrence Fern, Petsec’s Executive Chairman.
The divestiture is subject to customary closing conditions, and is expected to be completed on or before August 31st, 2020.