WOODSIDE Energy has signed a sale and purchase agreement with Shell Development Australia, to buy part of Shell’s interests in the Laminaria-Corallina project, off northern Australia.
Under the agreement, Woodside will buy from Shell an additional 16.67 per cent investment in production license AC/L5, which covers most of the Laminaria-Corallina project. In acquiring this interest, Woodside will also own an additional 16.67 per cent stake in the floating production storage and offloading vessel, Northern Endeavour.
The transaction, subject to approval by Australian regulatory authorities is expected to close by April 2005 with the purchase price of US$93.3 million to be reduced after adjustments for working capital and cash flow movements between the effective date and closing have been finalised.
Paladin Oil & Gas Australia, the other participant in the Laminaria-Corallina project, has agreed to purchase Shell’s remaining interests in AC/L5 and its 15 per cent interest in the adjacent exploration permit AC/P8.
Following the purchase, Woodside will own 66.67 per cent of the Corallina field and the Northern Endeavour as well as a 59.9 per cent interest in the Laminaria field.
Paladin will hold the remaining 33.3 per cent of both the Corallina field and Northern Endeavour and the remaining 41.1 per cent of the Laminaria field.
Woodside chief executive Don Voelte said in a stock exchange announcement the agreement would consolidate Woodside’s ownership in one of its key assets.
"We are keen to make further investments to increase production from the project as well as to pursue further opportunities in the area," Mr Voelte said.
"We supported the entry of Paladin into the joint venture because they shared our view of the investment opportunities in and around Laminaria-Corallina. We are each increasing our interests and are committed to working together to realise the full potential of these assets."
Woodside already plans to drill an infill appraisal well in the Laminaria field in the second quarter of 2005 and an exploration well in the AC/P8 permit later in the year.
At closing, the transaction will add about 7.2 million barrels of oil equivalent to Woodside’s proved and probable reserves and increase production by about 970,000 barrels of oil equivalent in 2005 and one million barrels of oil equivalent in 2006.
Woodside remains operator of the Laminaria-Corallina project and has the option to buy on fair market terms Paladin’s interest in the Northern Endeavour at the end of project life.
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