Cue Energy Resources Limited (CUE and the Company) announced the sale of its interests in Papua New Guinea to the National Petroleum Company of PNG for $7 million.
CUE received $7 millon in cash via the sale of 100 percent of the shares in CUE’s wholly-owned subsidiary, Cue PNG Oil Company Pty Ltd, effective Nov. 20, with the sale proceeds substantially exceeding the book value of the assets.
The sale follows a strategic review of the Company’s PNG assets and immediately allows CUE to realize value from its share of the declining reserves and contingent gas resources and releases CUE from a potential substantial well commitment of up to $10 million, delivering a material saving over the short to medium term.
The sale aligns with the Company’s strategy of operating in lower cost areas with near term development options and enables CUE to re-allocate capital to other opportunities more closely aligned with its strategy, including the recently increased 100 percent participating interest in the Mahakam Hilir PSC and farm-in to the highly prospective Mahato PSC, both located in Indonesia.
Commenting on the transaction, CUE CEO David Biggs said, “The sale of our interests in PNG, together with the recent announcements of our increased participating interest in Mahakam Hilir PSC and farm-in to Mahato PSC demonstrates CUE’s focus on delivering its strategy of effective capital allocation to core areas in support of CUE’s future growth.”
“We are very excited about our increased position in Indonesia and the proceeds from the sale of the PNG assets allows CUE to add value for shareholders in a more meaningful and immediate way.” Biggs said.
The asset interests sold by the subsidiary are:
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