PTTEP's Subsidiaries to Acquire Hess' Thai Upstream Assets for $1B
Thailand's PTT Exploration and Production Plc's subsidiaries PTTEP Offshore Investment Company Ltd. and PTTEP International Ltd. have signed a Share Purchase Agreement (SPA) to acquire 100 percent equity stakes of two subsidiaries of Hess Corp., namely Hess Thailand Holdings II Ltd. (HTH) and Hess Exploration Thailand Co. Ltd. (HETCL), for around $1 billion, CEO Tevin Vongvanich said in an announcement on the Stock Exchange of Thailand.
HTH has 100 percent equity stake in Hess (Thailand) Ltd. (HTL), which owns 15 interest in offshore Block B12/27 of Contract 4 Project – comprising mainly petroleum fields including Pailin, Morakot and Ubon – and 35 percent interest in onshore Block EU-1 and Block E5 North of Sinphuhorm Project. HETCL owns 15 percent interest in offshore Block G7/50 of Contract 4 Project.
PTTEP, which will fund the acquisition with the firm's available cash, revealed that the transaction of HTH already closed April 22, while completion of the HETCL transaction is expected in May.
"The acquisition of Hess Corporation’s interests in Contract 4 Project and Sinphuhorm Project is a strategic fit to PTTEP’s Growth Strategy of adding producing assets that contribute immediate revenue stream, accretion of volume growth and reserves, and enhance our position in Thailand," Tevin said.
Contract 4 Project is a natural gas field located in the Gulf of Thailand (offshore Songkhla Province), covering an area of 1,203 square miles (3,118 square kilometers), with total proved and probable reserves (2P) of 461 million barrels of oil equivalent (MMboe). Current production is around 387 million cubic feet per day (MMcf/d) of natural gas and 17,528 barrels per day of condensate.
PTTEP currently holds 45% interest in the Contract 4 Project and its interest will rise to 60 percent after the completion of the transaction. Chevron Corp., which has 35 percent interest in the project, will remain operator.
Sinphuhorm Project is a natural gas field located in Udon Thani and Khon Kaen provinces in northeastern Thailand, covering an area of 89.4 square miles (231.6 square kilometers) and has total proved and probable reserves (2P) 45 MMboe. The project now produces approximately 113 MMcf/d of natural gas and 496 barrels per day of condensate.
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