Rick Wilkinson
OGJ Correspondent
MELBOURNE, Mar. 7 -- AED Oil Ltd., Melbourne, has agreed to form a joint venture with Sinopec International Petroleum Exploration & Production Corp. of China in which Sinopec will acquire 60% of AED's assets in the Timor Sea.
These involve permits AC/P22, AC/L6, and AC/RL 1, which include producing Puffin oil field and Talbot oil field held under retention license.
Sinopec will become operator of the JV under the new arrangement, which will become effective Mar. 31.
The transaction, which values AED's hitherto wholly owned assets at $1 billion (Aus.), is subject to government approvals, including that of Australia's Foreign Investment Review Board.
AED said it will use the funds to retire debt, settle creditors, and fund its JV interest and ongoing development and exploration opportunities in the permits. The company owes Norwegian oil services firm AGR Group $41.5 million (Aus.) for production services and lease of the Puffin field floating production, storage, and offloading vessel.
AED's Puffin production has been less than the originally anticipated 30,000 b/d of oil from the two producing wells, Puffin-7 and Puffin-8. Flow has been limited to 10,000 b/d due to down-hole problems now attributed to drilling and completion flaws.
