AWE snubs Elixir, finds new buyer for Cliff Head

Oil and gas company AWE has found a new buyer for its majority stake in the Cliff Head offshore oil project, after Elixir Petroleum was unable to complete a previously announced deal.

In a brief statement today, Elixir said it had been informed by AWE that the company had entered into a definitive agreement with an unnamed third party for the sale of the 57.5 per cent interest in Cliff Head, located in the Perth Basin, and would no longer proceed with the proposed transaction with Elixir.

Under the agreement, announced in October last year, Elixir was to pay an upfront $1 million, plus further payments that were subject to revenue milestones, capped at $9 million.

“The board of Elixir is disappointed that AWE chose not to engage with Elixir about the status of its sale process until this late stage,” Elixir said in a statement.

“Elixir will continue to review and assess other oil and gas production opportunities.”

Roc Oil, the operator of Cliff Head, holds the other 42.5 per cent stake in the project.

In March, Elixir said it was still waiting on a number of 'key commercial and legal matters' that needed to be addressed before satisfying conditions relating to the deal with AWE.

It followed an announcement in February, with Elixir receiving an exclusivity period extension to complete the deal.

Elixir shares were down 50 per cent to 0.1 cents each just prior to the close of trade, while AWE shares were down 2.6 per cent to 83.7 cents each.