NGE's Sale of a 50% Stake in PNG's PPL 269 to Santos Nearer to Completion
New Guinea Energy Ltd. (NGE) referred Tuesday to its Feb. 13 announcement that NGE and its wholly owned subsidiary, Kirkland Limited (Kirkland) had signed an agreement with a subsidiary of Santos Limited, Barracuda Limited (Santos), regarding the proposed sale of Kirkland's 50 percent participating interest in Petroleum Prospecting License 269 (PPL269) in Papua New Guinea (PNG) to Santos for a maximum total consideration of up to $40 million (Sale Agreement).
Further to that announcement, NGE is pleased to advise shareholders that the Initial Conditions Precedent, under the Sale Agreement, have today been satisfied.
Completion of the sale of Kirkland's 50 percent interest in PPL269 under the Sale Agreement remains condtional on receipt of certain PNG governmental approvals. The timetable for the implementation of the transaction is now as follows:
- Remaining conditions, including Governmental approvals - By no later than Aug. 13, 2015
- Completion and Consideration Received - At least 10 business days after conditions satisfied
The consideration for the sale of the 50 percent interest in PPL269 includes:
- payment of $32 million cash on Completion; and
- payment of $2 million cash if a Petroleum Retention License (PRL) is granted over any area of PPL269; and
- payment of a further $6 million cash if a Petroleum Development License (PDL) is granted over any area of PPL269. (However, if a PDL is granted prior to PRL, a one off payment of $8 million cash will be payable instead)
Under the Sale Agreement, Santos also agreed to fund Kirkland's participating share of expenditure under certain pre-approved Work Programs and Budgets. Kirkland will not be liable to repay any funds advanced by Santos in relation to this expenditure other than in very limited circumstances.
NGE looks forward to further updating shareholders as to the satisfaction of the remaining conditions in due course.
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