Australia's AWE Limited announced Tuesday that it has agreed to sell an 11.25 percent interest in T/L1 (BassGas infrastructure & Yolla field) and a 9.75 percent interest in T/18P (Trefoil field) in the Bass Basin, Australia to Prize Petroleum Company Limited, a wholly owned subsidiary of Hindustan Petroleum Corporation Limited, for a total cash consideration of $74.48 million (AUD 85 million).
AWE will receive $70.1 million (AUD 80 million) upon completion of the sale with a further $4.38 million (AUD 5 million) deferred payment payable upon meeting the following conditions:
The sale is subject to standard joint venture and government approvals for a transaction of this nature including the Australian Foreign Investment Review Board and the Reserve Bank of India.
The effective date for the sale is July 1, 2013 and is subject to completion adjustments. At completion, AWE will hold 35 percent in T/L1 (BassGas/Yolla) and 35 percent in T/18P (Trefoil).
Upon completion, the sale is expected to generate an estimated unaudited after tax loss of approximately $8.76 million (AUD 10 million), subject to the completion date and subsequent adjustments.
AWE’s Managing Director, Bruce Clement, said, “The sale of an 11.25 percent interest in BassGas is another successful strategic initiative for the company and is an excellent outcome for AWE.
“Whilst recording a non-cash loss on the sale, the release of capital from the BassGas asset will further strengthen our financial position and reduce AWE’s exposure to capital commitments for the final stages of the MLE project. Our remaining 35 percent interest in BassGas is an appropriate holding in this nonoperated asset and, importantly, maintains our voting rights at a level that provides control over major investment decisions.
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