Anzoil reduces interest in Viet Nam permit

Anzoil NL, Perth, said this week it would reduce its interest in the Hanoi basin exploration permit in northern Viet Nam through an equity swap with its partner and largest shareholder, Maurel & Prom (M&P). Anzoil said it wants to shift its focus away from Viet Nam.

If the transaction is approved by shareholders, M&P will acquire 15% of the permit from Anzoil, bringing M&P's interest to 55%, while Anzoil will continue to hold 45%. M&P now holds 18.4% of Anzoil, or about 60.6 million shares; after this transaction, M&P will own 49.5 million shares.

Previously, M&P carried Anzoil through an $20.8 million drilling and testing program to earn a 40% interest in the Hanoi basin permit.

M&P and Anzoil have spent about $70 million over the past 6 years in exploring the basin. The D14-1 well is flowing commercially sustainable rates, says Anzoil. Several undrilled and follow-up prospects remain to be drilled on land and offshore in the basin.

Anzoil and M&P have agreed to apply for a 2-year extension to the Hanoi basin permit in exchange for the drilling of one well and a partial relinquishment of their acreage. M&P also will carry Anzoil through the development of a gas-to-power project for $10.65 million; M&P will hold an 80% interest in the project and Anzoil 20%.

M&P will fund at least one new well on the permit; the JV seeks a third party for additional funding.