Petsec Energy reaches sale agreements worth $65 million

Australian company Petsec Energy Ltd. said its wholly owned US subsidiary Petsec Energy Inc. has either sold or signed deals to sell most of its leases. The sales will total about $65 million.


Australian company Petsec Energy Ltd. said its wholly owned US subsidiary Petsec Energy Inc. has either sold or signed deals to sell most of its leases. The sales will total about $65 million.

In April, PEI filed Chapter 11 bankruptcy, and in June reached an agreement with its creditors to sell itself or its assets.

PEI has already sold its 33% interest in Mustang Island 883 and 100% interest in Mustang Island leases 748, 749, 795, 797, 940, and 941 to LLOG Offshore Exploration Inc. for $6.4 million. The effective date of the transaction was Aug. 1.

PEI will present several purchase and sale agreements to the bankruptcy court for approval as initial bids. PEI expects to conduct a final auction of the assets in early November 2000 if any competing bids are received.

A brief description of the proposals follows:

Apache Corp. signed an agreement for Petsec Energy Inc.'s 50% working interest in Main Pass leases 5, 6, 7, 84, 90, 91, 93, 104, and 105; Grand Isle 45; Ship Shoal leases 192, 193, and 194; South Marsh Island 7; and West Cameron leases 237, 543, 544, and 653. The effective date of the proposed sale is Oct. 1, 2000. The sale price is $51.2 million. Apache is the operator of the leases.

ATP Oil & Gas Corp. has signed an agreement to buy PEI's interests in the West Cameron 461 lease and South Marsh Island 189 and 190 leases. The purchase prices are $1.6 million and $3.1 million, respectively, each with an effective date of Oct. 1, 2000.

Purchase and sale agreements have been signed with Stone Energy Corp. covering PEI's interests in South Pelto 22 lease and Vermilion Block 258 leases. The purchase prices are $800,000 and $1.7 million, respectively, each with an effective date of June 1, 2000.

There are six exploration leases and other miscellaneous assets that are not subject to the Apache, ATP, or Stone agreements, which PEI will market and sell subject to bankruptcy court approval.

Net proceeds from the sales of PEI's assets will be distributed to PEI's creditors, Petsec (USA) Inc. (wholly owned by Petsec Energy Ltd.), as equity owner, and certain of PEI's senior management team in the USA, said Petsec Energy Ltd.

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