AWE Completes Sale of 50% Stake In West Natuna PSC to Santos

Australia-based AWE Limited reported Monday that the sale of a 50 percent participating interest in the Northwest Natuna Production Sharing Contract (PSC) off Indonesia, including the 101 million barrel (K-Sand) Ande Ande Lumut oil project, to a subsidiary of Santos Limited has been successfully completed.

The Indonesian Ministry of Energy and Mineral Resources and the regulator, SKK Migas, have approved the sale of a 50 percent participating interest and the transfer of Operatorship to Santos.

Further to the company’s Australian Securities Exchange (ASX) release Aug. 22, the 50 percent interest in the Northwest Natuna PSC was sold to a subsidiary of Santos Limited for total consideration of $188 million. This comprises $100 million payable on completion and a $88 million capital expenditure carry, cost recoverable to AWE. The effective date for the sale is July 1.

AWE acquired 100 percent of the Northwest Natuna PSC in February 2012 for $39 million plus $100 million in debt. The subsequent sale of a 50 percent interest for $188 million is expected to generate an estimated unaudited after tax profit of approximately $54.9 million (AUD 60 million).

AWE has received the cash consideration, less tax payable in Indonesia, of $93 million. AWE has also received an interim working capital adjustment payment of $2.9 million. These funds will be used to retire debt, resulting in a net cash position for AWE, a stronger balance sheet and undrawn facilities of $274.53 million (AUD 300 million).

Managing Director of AWE, Bruce Clement, said that the completion of the sale was a major financial and operational success and would set the stage for a new period of growth for the company.

“The completion of the sale of a 50 percent participating interest in the Northwest Natuna PSC to Santos is a significant milestone for AWE. The transaction highlights the success of our Asia growth strategy and underlines the technical and commercial strengths of AWE.


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