New Zealand Oil & Gas (NZOG) has agreed to acquire interests in three gas producing projects located in the Northern Territory from Central Petroleum.
The acquisition will increase the company’s 2P reserves by 14.5 million barrels of oil equivalent – a near five-fold increase.
The proposed transaction comprises a 25 per cent interest in the Mereenie oil and gas fields, a 50 per cent interest in the Palm Valley gas field and a 50 per cent interest in the Dingo gas field, which are all located in the Amadeus Basin.
NZOG will also acquire a 70 per cent and Cue Energy Resources will acquire 30 per cent of assets sold by Central Petroleum.
If the agreement is approved, Central Petroleum will revive a cash payment of $29 million.
NZOG will also fund Central Petroleum’s share of the costs of exploration, appraisal and development upon to a capped of $40 million.
Central Petroleum will remain as operator and manage the gas sales function on behalf of the two parties.
NZOG chief executive Andrew Jefferies said the acquisition fits the company’s strategy for growing the business by acquiring production.
“The acquisition utilises NZOG cash and balance sheet strength. The assets have multiple development and exploration pathways to growth, which this deal will unlock,” he said.
“Management and the board feel this deal delivers what we promised in our revised strategy released June 2020 providing shareholders with a highly attractive, value adding opportunity.”