Horizon Oil sells Papua New Guinea gas interests

Horizon Oil sold some of its Papua New Guinea gas and condensate interests, including the Stanley, Elevara, and Ketu discoveries, to Thailand's privately owned P3 Global Energy for $55 million.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, May 21 -- Horizon Oil Ltd., Sydney, sold some of its Papua New Guinea gas and condensate interests, including the Stanley, Elevara, and Ketu discoveries in the foreland regions, to Thailand's privately owned P3 Global Energy Co. Ltd. (P3GE) for $55 million.

PK Group will acquire 50% interest in petroleum retention lease (PRL) 4 (containing Stanley), and 24.82% interest in PRL 5 (containing Elevara and Ketu).

Horizon retains 50% of PRL 4 and 24.82% interest in PRL 5.

Payment will be $30 million at close of the deal scheduled July 31. A further $15 million will be by way of letter of credit to be drawn at any time after the close and is to be applied to Horizon's share of exploration and development expenditure on both permits.

The remaining $10 million also will be by letter of credit to be drawn following the grant of a petroleum development license for a field development project in either PRL 4 or PRL 5.

The choice is likely to be Stanley as preliminary work already done by Icon Engineering and submitted to the PNG Government in February suggests a recycling project such that production of 140 MMcfd of gas from two wells will result in extraction of an initial 4,000 b/d condensate and potentially 40 tonnes of LPG a day with re-injection of dry gas into the reservoir until a gas market develops. Condensate would be shipped down the navigable Fly River and out to the Gulf of Papua.

Stanley gas could be used for power generation to supply local domestic and industrial customers. Elevara and Ketu combined have more gas reserves and would support an export project.

P3GE is a private concern with core business in petroleum exploration and production, gas transmission, and distribution. It operates in seven countries across three continents.

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