Paladin Sells Stake in Njord Field to E.ON
Paladin Resources' subsidiaries, Paladin Resources Norge AS and Paladin Resources (Norway) Limited, have signed a Sale and Purchase Agreement with E.ON Ruhrgas Norge AS, a wholly owned subsidiary of E.ON Ruhrgas AG, under the terms of which E.ON Norge will acquire Paladin's 15 per cent fixed unitized interest in the Njord Field and associated license interests.
The sale price is US$90 million in cash and is subject to adjustments for working capital as at the effective date of January 1, 2005, and for interest and cash flow movements from the effective date until completion, which is expected to take place in the third quarter of 2005. Proceeds from the sale will be credited to the Company's debt facility, creating enhanced flexibility to fund further acquisitions and the Group's ongoing organic capital investment program.
As a result of the sale of Paladin's Njord Field interest, it is anticipated that 2005 annualized average Group production will be approximately 47,500 boepd. The Group's proven and probable reserve base will reduce by some 16 Mmboe with effect from January 1, 2005.
Completion of the acquisition is subject to the approval of the Norwegian regulatory authorities and to the approval of the Supervisory Board of E.ON Ruhrgas AG. Roy Franklin, Chief Executive of Paladin Resources plc, commented:
'This is a deal very much in line with Paladin's strategy. The future of the
Njord Field is largely about gas with the gas blowdown project now well underway
and sales scheduled to start in late 2007. This deal gives Paladin a risk-free
premium price for our interest in the field from a buyer with a substantial
downstream European gas business and a different strategic perspective on the
value of uncontracted gas.'
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