Horizon Oil has agreed to sell its portfolio of assets in Papua New Guinea to Arran Energy for $US3.5 million ($4.9 million).
Following completion of the deal, Horizon will cease to have any operations in PNG.
Arran, a privately-owned Australian company and co-venturer with Horizon in PNG, already owns several assets in the country.
They include operated working interests in PDL 10 (Stanley) and PRL 40 (Puk Puk / Douglas), as well as non-operated interests in PRL 21 (Elevala / Ketu) and PRL 28 (Ubuntu).
Horizon chief executive officer Chris Hodge said PNG had been a big part of the company’s story for many years and the decision to sell was not taken lightly.
“While undoubtedly a substantial, good quality resource, our ability to realise value in PNG was becoming increasingly long dated and uncertain, as was highlighted by the impairment write-downs take earlier in the year,” Hodge said.
“Divestment of our PNG interests was carefully considered in the context of our overall corporate strategy and we are pleased to have agreed with Arran Energy.
“The transaction will provide Horizon with an opportunity to reset and optimise its asset portfolio and focus its efforts on securing a significant growth asset.”
The transaction is subject to certain conditions, including waiver or expiry of pre-emptive rights under joint venture agreements, but is expected to be completed during the current quarter.
As part of the deal, Horizon will also release Osaka Gas Australia.