Novus sells Egypt assets to Apache, buys Texas assets

Novus Petroleum Ltd., Sydney, has sold its Egyptian assets to Apache Corp. and acquired Texas assets from the same company.

By the OGJ Online Staff

HOUSTON, Aug. 9 -- Novus Petroleum Ltd., Sydney, has sold its Egyptian assets to Apache Corp., Houston, and acquired Texas assets from the same company.

Apache paid Novus subsidiary Novus Bukha Ltd. $62 million for the Egyptian assets, which include a 10% working interest in the Khalda, Khalda Offset, and Ras El Hekma concessions, and 6.36% of the Ras Kanayes concession. Apache operates all the concessions. The effective date of the transaction is July 1, though it is subject to Egyptian government approval, expected within 2 months.

Novus Managing Director Bob Williams said, "In Egypt, Novus was finding it difficult to grow a country business unit beyond the properties we hold with Apache ... On the other hand, Apache (officials) were keen to consolidate their position in our joint assets (to secure 100% ownership) and offered Novus an attractive price."

The Sydney-based company had acquired the assets in 1998 from Samsung for $40 million.

Novus is paying $58 million for the Texas assets, which include a 30% interest and associated deep exploration rights in the producing Stratton gas fields onshore in the Gulf of Mexico basin and a 50% working interest in the deep exploration rights for the Magnet Withers field, 60 miles southwest of Houston.

Stratton net revenue interest to Novus will be 19.5%. Closing of the deal is expected in the third quarter.

The proven reserves of the US portfolio, said Novus, are 12.6 million boe.

Apache operates with 100% working interest most of the Stratton leases. The Stratton deal includes preferential purchase rights being written into the joint operating agreement.

Williams said the sale of the assets and the purchase of the US portfolio will be earnings positive from 2002. "The US assets purchased from Apache will fit very well with our Padre Island assets, while we are exiting Egypt totally."

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