The purchase price is US$46.87 million in cash effective as at 1 July 2004, and is subject to adjustments for working capital and cash flow movements between 1 July 2004 and completion, which is expected to take place by April 2005. The transaction is subject to the approval of the Australian regulatory authorities.
Woodside Energy Ltd., the other joint venture partner and operator of the Laminaria and Corallina Fields, has announced that it has signed an agreement to purchase the balance of Shell's interests in the two fields.
The Laminaria and Corallina Fields are located in the Timor Sea approximately 550 km WNW of Darwin in water depths of ca. 350-400 meters. Discovered in 1994 and 1995 respectively, the fields were developed jointly by subsea production wells tied back to the purpose-built Northern Endeavour FPSO and brought on-stream in late 1999. Peak production of 180,000 barrels of oil per day was reached in early 2000, since when the fields have been in natural decline, averaging approximately 31,000 barrels of oil per day gross in 2004. The crude oil from both fields is light and of high quality. Paladin acquired its initial interests in both fields from BHP Billiton Petroleum (North West Shelf) Pty Ltd. in a transaction which completed in January 2005.
The acquisition of these additional interests is expected to add some 1,250 barrels of oil per day to annualized Group production in 2005, and to contribute some 3 million barrels of proven and probable reserves to the Group's reserve base at completion, with the potential for material upside. An infill well is planned on the Laminaria Field in the second quarter of 2005 and an exploration well in the AC/P8 permit later in the year.
Ownership changes as a result of the transactions are as follows:
Pre Sale Post Sale per cent per cent Interests in Corallina Field and FPSO Woodside 50 66.67 Paladin 25 33.33 Shell 25 0 Unitised Interests in Laminaria Field Woodside 44.9 59.9 Paladin 32.6 40.1 Shell 22.5 0 Interests in Exploration Permit AC/P8 Woodside 85.0 85.0 Paladin 0 15.0 Shell 15.0 0
Roy Franklin, Chief Executive of Paladin, commented:
'We share Woodside's view that there are attractive investment opportunities in and around the Laminaria and Corallina Fields, and are committed to working together to realize their full potential.'
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