Oil Search buys into Elk-Antelope fields in Papua New Guinea

Oil Search Ltd. has signed a deal to acquire a 22.835% stake in retention licence PRL15 containing the Elk and Antelope fields in the eastern Highlands of Papua New Guinea for $900 million.

The deal involves the acquisition of 100% of Pac LNG Group (formerly Pacific LNG), which is affiliated with the privately owned Swiss banking firm Clarion Finanz AG. The transaction is unconditional and expected to settle within 2 weeks.

Pac LNG holds the 22.835% interest in PRL15 as well as being a major shareholder of InterOil Corp., which in turn currently holds a 75.6114% stake in the Elk-Antelope permit.

InterOil brought France’s Total SA into the PRL15 permit last December for a 61.3% stake in a deal worth $3.6 billion. That deal is due for completion by the end of this year’s first quarter.

Oil Search will fund its Pac LNG acquisition with the placement of 149.39 million fully paid ordinary shares to the PNG Government at $8.20 (Aus.)/share.

Oil Search says this deal will facilitate the ongoing strategic relationship between the company and the Papua New Guinea government.

The government in its turn has entered into arrangements with international financial services company UBS to fund the placement. This includes UBS establishing a hedge position in Oil Search of $700 million (Aus.) at $8.20/share. Priority in any allocation under the hedge will be given to eligible existing Oil Search shareholders.

The government has been a major investor in Oil Search since its merger with Orogen Minerals in 2002. The placement enables the government to continue that interest which was approaching a crossroad at the end of March.

That date marks the maturity of an exchangeable bond deal transacted in 2008 whereby Papua New Guinea used its 14.64% stake in Oil Search to raise $1.681 billion (Aus.) from Abu Dhabi company International Petroleum Investment Co. (IPIC) to fund the government’s stake in the ExxonMobil Corp.-led PNG-LNG project.

The government’s present shareholding in Oil Search will now pass to IPIC. IPIC has a reputation for being a long-term investor in overseas energy assets.

Oil Search’s Elk-Antelope acquisition is in line with the company’s strategy to aggregate gas resources to underpin LNG expansion opportunities in Papua New Guinea. The purchase also diversifies the company’s portfolio and is complementary to its existing assets in the country, including its stake in the PNG-LNG project.

The present estimates for contingent resources in Elk-Antelope are 5.3 tcf of raw gas including 75 million bbl of associated liquids.

Up to three appraisal wells, including the planned Antelope-4 well, are scheduled for drilling in PRL15 during the next 18 months to prove up sufficient gas resources to support a new LNG development.

Oil Search’s costs in this program for 2014 as an equity partner within PRL15 are estimated to be $30 million. The program is operated by Total.

In a separate deal Oil Search has entered a heads of agreement with Pac LNG to potentially acquire an interest in four other PNG permits, including the Triceratops gas discovery in PRL 39.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected