Sale recognises value of Papua New Guinea exploration licences

ASX-listed company New Guinea Energy(NGE) has agreed to sell one of its six onshore exploration licences to Oil Search and ExxonMobil subsidiary Esso PNG Exploration for US$7.5 million each.
NGE stated that under the terms of the agreements, and contingent on receipt of the next extension of PPL 277 and other requisite government approvals, Esso and Oil Search would each acquire a 50 per cent working interest in the licence in exchange for a total of US$15 million. “Subject to further conditions, NGE may become entitled to an additional US$20 million if a petroleum development licence is granted, and if commercial production occurs, a royalty over all revenue received from the petroleum produced and sold,” the company stated. Situated in the PNG Highlands, PPL 277 adjoins several licences which Oil Search already holds interests in.
“These include the PDL 8 licence, which contains the Angore PNG LNG project gas field, and PRL 11 which contains the Trapia prospect, due to be drilled following the P’nyang South well,” Oil Search managing director Peter Botten said in a statement. The drilling of Trapia-1 on the border of PRL 11 and PPL 277 during the fi rst half of 2012 will mark the fi rst exploration activity near PPL 277. Trapia is a large structure within PRL 11 near the PNG LNG project infrastructure, and may overlap into PPL 277.
“These agreements are a potential game-changer for NGE and represent a tremendous outcome for our company as they recognise the value of NGE’s properties; reduce NGE’s risk and capital obligations associated with working in the PNG Highlands; and provide NGE with high-side exposure and a source of ongoing revenue in the event of commercial development,” NGE chief executive Grant Worner said in a statement.
NGE’s onshore licences cover 44,800 square kilometres which, according to the company, represents one of the last available highly prospective, onshore, non-aligned acreage positions in South East Asia.

By Jaimee Mann

One Response to Sale recognises value of Papua New Guinea exploration licences

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