Tap Oil Sells Harriet Subsidiary to Apache
Tap Oil Limited (Tap) has executed an agreement to sell its wholly owned subsidiary, Tap (Harriet) Pty Ltd, to a subsidiary of Apache Corporation (Apache) for $10 million. Tap (Harriet) Pty Ltd holds a 12.2229% interest in the Harriet Joint Venture (HJV) as well as a 10% interest in WA-45-R, WA-46-R and a 20% interest in WA-334-P.
Importantly for Tap, following completion of the sale, Apache will assume all the liabilities and benefits of Tap (Harriet) Pty Ltd from an effective date of January 1, 2012, including the legal actions.
The transaction has clear strategic rationale for both parties. Through this transaction, Tap is able to eliminate the uncertainty for shareholders introduced by litigation, and devote more time to the development and growth of assets which will underpin the Company in years to come. Apache has significant gas reserves in the region beyond the HJV and will be able to extract substantially more value from the facilities on Varanus Island beyond the depletion of the HJV reserves, estimated to be in the next few years.
Tap's Managing Director/CEO, Troy Hayden said, "This is a great outcome at every level for Tap, our shareholders and potential investors. Removing the legal issues associated with the Harriet Joint Venture allows Tap management to focus on our development projects and exploration activities and enables potential investors to now assess Tap's value without the uncertainty associated with outstanding protracted legal cases.
"The reserve life of the Harriet Joint Venture is approaching its end and Tap's production will be more than replaced by the commencement of new production from the Manora field in early 2014."
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