Bengal Energy announced that it has exercised its pre-emptive right to purchase an additional 5.357 percent interest in the Cuisinier Oil Field and the Authority to Prospect (ATP) 752P (the "Acquisition") in the Cooper-Eromanga Basin in Queensland, Australia, bringing the Company's total ownership to 30.357 percent. The Cuisinier Oil Field has 13 successful light oil wells drilled to date, is connected by pipeline to the Cook Processing Facility, and currently generates production of approximately 375 barrels of oil per day net to Bengal. After giving effect to the Acquisition, this production is expected to increase by more than 20 percent, to approximately 455 bopd. Over the coming months, the Company will be well positioned to further benefit from additional volumes coming on-stream once the five successful wells drilled in the 2013 campaign are tied in, which is anticipated to occur in September of this year.
Bengal's purchase price for the additional interest is expected to be approximately $7 million (AUD 7.6 million) and is subject to closing costs and normal closing adjustments from the effective date of March 15. Bengal anticipates securing predominantly debt financing for the Acquisition and will provide further information once additional details are available with respect thereto.
Bengal is exercising its pre-emptive right pursuant to the proposed sale by one of the joint venture partners of a 15 percent interest in ATP 752P for $18.6 million (AUD 20 million). The Acquisition will be effected by way of an asset sale agreement, which the Company expects to enter into in July 2013, and will be subject to receipt of necessary governmental approvals in Australia.
"Increasing our ownership in Cuisinier is a very positive development for Bengal," said Chayan Chakrabarty, Bengal's president & CEO. "As a result of this Acquisition, net production to Bengal will increase by more than 20 percent, and coupled with the area's attractive netbacks, enables us to generate higher incremental cash flows. Further, the Company will be positioned to realize a greater proportion of future booked reserves, which is expected to enhance the Company's growth and underlying value."
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