Luco Energy Pty. Ltd., owned by Ilwella Pty Ltd. and AJ Lucas Services, agreed to acquire Australian assets and operations from Tag Oil Ltd.
The arm's length transaction involves the sale by TAG Oil of the shares of its Australian subsidiary, Cypress Petroleum Pty Ltd., which holds the company's 100% working interests in PL 17, ATP 2037, and ATP 2038 in the Surat basin of Queensland, Australia, to Luco. In the Surat basin, Tag holds production and exploration permits in acreage containing two undeveloped light oil fields and a deeper Permian play with unconventional tight gas-condensate play opportunities.
Closing of the deal is expected in this year’s fourth quarter, subject to certain customary conditions, including approval of the TSX Venture Exchange.
The deal includes a cash payment to TAG Oil of $2,500,000 (Aus.) at closing. TAG Oil will receive a 3% gross overriding royalty on future production from all liquids produced from the permits.