Australian oil and gas company AWE has completed the sale of its 57.5% interest in the Tui Area Oil Project off New Zealand, including the transfer of operatorship, to Malaysia’s Tamarind Management.
AWE said on Wednesday that the 57.5 percent interest in Tui was for a cash consideration of $1.5 million before tax and that this concluded the company’s planned divestment program.
Through the deal, Tamarind acquired all of the outstanding shares of AWE New Zealand Pty Ltd and AWE Taranaki Limited, which together own 57.5 percent in the project. The sale also includes operatorship, assets and inventory, and a working capital cash balance of $10.8 million.
To remind, AWE agreed to sell the Tui area oil fields stake to Tamarind back in December 2016. Also, Tamarind will be the 100 percent owner of Tui since the company announced the acquisition of the remaining 27.5 and 15 percent stake from New Zealand Oil & Gas and Pan Pacific Petroleum, respectively, last month.
AWE estimates a completion payment to Tamarind of $2.2 million ($1.7 million) for purchase price adjustments. These adjustments include the close out of unutilized Brent oil price hedges.
The sale of Tui is estimated to generate a non-cash profit after tax of A$27 million ($20.6 million), after purchase price adjustments, and has reduced AWE’s provisions for future abandonment liabilities by A$67 million ($51.2 million).
David Biggs, CEO and Managing Director of AWE, said: “Completion of the Tui sale further strengthens AWE’s balance sheet and moves us closer towards our goal of transitioning from legacy production assets to new growth assets.
“Being a late life asset, the sale of Tui will have minimal impact on our 2P Reserves and 2C Contingent Resources. AWE is now focused on developing Stage 2 of the Waitsia gas project, and we are looking to acquire additional production assets.”
Ian Angell, CEO of Tamarind, added: “The Tui asset and the AWE team in New Plymouth represent a great starting point for Tamarind as an oil producer and operator.
“We are confident that we can continue the great performance of Tui going forward which will bring benefits to all stakeholders, Tamarind, our New Zealand employees and contractors, and the New Zealand regulatory bodies and treasury.”
The Tui Area Oil Fields comprises the Tui, Amokura and Pateke fields which are located some 50 kilometers off the coast of Taranaki, New Zealand, in PMP 38158. Production from each field is fed into the Tui gathering system and then into the FPSO vessel, the Umuroa.
The contract for the Umuroa was extended in January 2016 for one year and will last from the fourth quarter of 2016 to the fourth quarter of 2017.