NGE to sell shares

 New Guinea Energy (NGE) will sell 50 per cent of its interest in Petroleum Prospecting Licence 269 (PPL269) to Santos for up to US$ 40 million (K106m).

This was after its subsidiary Kirkland signed an agreement with Santos’s Barracuda Ltd.

Minister for Petroleum and Energy Nixon Duban has advised his approval of the transfer of the 50 per cent from Kirkland to Santos.

Chief executive Grant Worner said: “This transaction is consistent with NGE’s strategy of monetising its gas assets so the company can focus on oil exploration in Papua New Guinea. “The sale of PPL277 in late 2012 has, and this sale of PPL269 will, provide material cash injections whilst allowing NGE to retain an interest in the potential upside of developing these assets.” 

The consideration for the sale of the 50 per centinterest in PPL 269 includes:

• Payment of US$32 million (K83m) cash on completion;
• payment of US$2 million (K5m) cash if a Petroleum Retention Licence (PRL) is granted over any area of PPL269; and,
• Payment of a further US$6 million (K15m) cash if a Petroleum Development Licence (PDL) is granted over any area of PPL269. (However, if a PDL is granted prior to a PRL, a one off payment of US$8 million cash will be payable instead).

Completion of the sale of Kirkland’s 50% interest in PPL269 under the Sale Agreement is conditional on receipt of certain government approvals, some of which must be satisfied within six months of the execution date. 

Under the Sale Agreement, Santos has agreed to fund Kirkland’s participating share of expenditure under certain pre-approved work programmes and budgets. 

Kirkland will not be liable to repay any funds.