AWE Completes Partial Sale of Stakes in 2 Bass Basin Permits to HPCL
AWE Limited disclosed Tuesday the completion of the sale of an 11.25 percent interest in T/L1 (BassGas infrastructure & Yolla field) and a 9.75 percent interest in T/18P (Trefoil field) in the Bass Basin, Australia to Prize Petroleum Company Limited, a wholly owned subsidiary of Hindustan Petroleum Corporation Limited.
Total consideration for the sale was $74.3 million (AUD 85 million) with payment structured in three tranches:
- a deposit of $13.9 million (AUD 16 million) that was received in financial year 2013-14
- a payment of $55.9 million (AUD 64 million) that was received on completion of the sale; and
- a further $4.3 million (AUD 5 million) deferred payment payable upon meeting the following conditions
- $2.1 million (AUD 2.5 million) on completion of the BassGas Mid Life Enhancement (MLE) project (drilling of two development wells and installation of gas compression)
- $2.1 million (AUD 2.5 million) if the MLE project costs do not exceed an agreed threshold
The effective date for the sale is July 1, 2013 and is subject to completion adjustments relating to the net income received and capital invested since this date. The completion adjustment will be finalized prior to the end of the calendar year.
Proceeds of the completion funds of $55.9 million (AUD 64 million) will be used to repay drawn debt and to fund development projects. All joint venture and government approvals for this transaction have been received and AWE now holds 35 percent in T/L1 (BassGas/Yolla) and 35 percent in T/18P (Trefoil).
AWE’s Managing Director, Bruce Clement, said the successful completion of the sale of an 11.25 percent interest in BassGas is another strategic milestone for AWE.
“We have reduced our equity in the project to 35 percent, which is an appropriate level for AWE in a nonoperated asset and represents a good balance between risk and return. Importantly, with a 35 percent interest, AWE’s voting rights remain at a level that provides control over major investment decisions.
“Preparations are well underway for the final two stages of the BassGas Mid Life Enhancement (MLE) project with the gas compression and condensate pumping modules lifts scheduled for late 2014, and the drilling of two development wells in early 2015.
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