04/12/2014 - 14:02

Carnarvon to dispose Thai assets for $68m

04/12/2014 - 14:02

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Shares in Perth-based Carnarvon Petroleum have surged on news it entered into an agreement to sell its remaining 20 per cent interest in its Thailand oil production assets to the Berlanga Group for $68.5 million.

Carnarvon to dispose Thai assets for $68m
Carnarvon's Atwood Eagle rig at the Phoenix South well.

Shares in Perth-based Carnarvon Petroleum have surged on news it entered into an agreement to sell its remaining 20 per cent interest in its Thailand oil production assets to the Berlanga Group for $68.5 million.

A deposit of $2.3 million has already been paid by Berlanga, which is a consortium that invests in and develops oil and gas projects around the world.

It has invested in projects in Central Asia, in countries such as Kazakhstan, Turkmenistan and Uzbekistan.

Berlanga also has an agriculture, mining, construction and real estate investment portfolio.

In a statement, Carnarvon said the sale included working capital of about $US8.2 million and was subject to terms and conditions including receiving consent from its joint venture partners.

Carnarvon originally had a 40 per cent interest in the Thai assets, but in March it sold half to Singapore-listed oil and gas company Loyz Energy, which then became a joint venture partner.

A total of $US33 million was paid to Carnarvon for the 20 per cent interest, while up to $US32 million was agreed to be paid annually at a rate of 12 per cent of Loyz’s future revenue, capped at $US10 per annum.

The asset divestment will allow Carnarvon to focus on exploring for oil and gas in the North West Shelf off the coast of Western Australia.

Carnarvon chief executive Adrian Cook said the company’s balance sheet would be strengthened with cash forecast to exceed $100 million following completion of the transaction in February next year.

“On completion of this transaction we will have realised $US91 million in the past year from the sale of our Thailand interests, with up to a further $US32 million to be received in the future,” Mr Cook said.

“With the sale, we are now entirely focused on maximising value in the North West Shelf.

“Upon completion of the sale we will have secured important funding for our future activities without diluting our shareholders’ interests or raising debt.

“We are now well funded and focused to follow up on our success at the Phoenix South well.”

In August, Carnarvon’s shares nearly tripled in valued after it announced it had made a major oil discovery at its Phoenix South well, located in the North West Shelf.

Carnarvon was advised by Miro Advisors and King & Wood Mallesons was the lawyer.

Shares in Carnarvon were 19.3 per cent higher at 18.5 cents per share at the close of trade.

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