TAG Oil Divests Australian Assets, Refocuses on MENA
Luco Energy Pty Ltd., an Australian oil & gas company jointly owned by Ilwella Pty Ltd. and AJ Lucas Group Ltd., has entered into a sale and purchase agreement with TSX-listed TAG Oil Ltd. to acquire its wholly-owned subsidiary, Cypress Petroleum Pty Ltd., for a total consideration of A$2.5 million. Ilwella is the family office of Australian billionaire businessman Brian Flannery. AJ Lucas is a specialized mining and infrastructure service provider headquartered in Brisbane.
The transaction represents the sale of all of TAG Oil’s Australian assets as part of a strategic realignment of its oil & gas activities. The company now plans to focus its operations on the Middle East and North Africa (MENA) region.
Under the terms of the deal, Luco Energy will indirectly acquire TAG Oil’s 100% working interest in PL 17, ATP 2037, and ATP 2038 in the Surat basin in Queensland. In addition, it will also grant a 3% Gross Overriding Royalty (GORR) to TAG Oil on future production from all liquids produced from the permits.
“The sale of TAG Oil’s Australian assets and operations to the Ilwella group enables the company to strengthen its balance sheet while still maintaining exposure to potential future upside from the prospective permits through the royalty. The company is continuing to assess various oil and gas acquisition opportunities of assets and/or companies in the initial focus area of the Middle East and North Africa that will provide value to shareholders,” said Abby Badwi, Executive Chairman of TAG Oil.
The transaction is subject to customary closing conditions, including the receipt of TSX-V approval, and is expected to close in Q4-2020.