Sydney-based Petsec Energy Ltd today announced an agreement which will substantially increase its cash resources to US$37 million with the sale of selected USA oil and gas interests to a privately held U.S. exploration and production company.
The agreement delivers $17 million in cash to Petsec Energy and the right of participation in four of the Purchaser’s high potential South Louisiana exploration prospects, including the ASF #4 prospect, successfully drilled in June , and expected to be in production in mid July.
The interests to be sold are the Marathon and Main Pass 270 fields and some associated exploration interests.
The transaction has an effective date of 1 January 2014 and, subject to the usual and customary closing conditions including a preferential right to purchase, is expected to close on or before 14 July 2014.
Petsec Energy has oil and gas production and exploration interests in the USA in South Louisiana and offshore Gulf of Mexico, and more recently, in the Republic of Yemen where it joined another Australian company, Oil Search Limited, in the highly promising oil prospective Block 7.
Petsec Energy’s Chairman, Terry Fern, said: “This transaction is further evidence that Petsec Energy’s return to growth through conventional oil and gas exploration is gathering momentum. Through this transaction we have secured the right to participate in further high potential prospects and have sold our mature, fully developed production in the Marathon and Main Pass 270 fields to provide the capital for exploration and development of our exciting exploration prospects. It is our belief that the application of the capital released from this transaction can achieve a significantly higher rate of return through successful exploration than by producing these fields through depletion and abandonment. We now have sufficient capital and prospects to meet our exploration and development expectations for 2014 and 2015. We are particularly pleased that the first well in our 3 to 4 well exploration program for 2014, the ASF #4 well, was successful, and should be in production in the next few weeks. We look forward to the spudding of wells in the 3rd and 4th quarters of this year. “
The Purchaser is a Houston based, private U.S. exploration and production company which operates in South Louisiana and offshore Gulf of Mexico.