ARC
purchases Hardman’s Perth Basin Assets
Posted: 4 March 2004
ARC Energy Limited and Hardman Resources Ltd announced ARC has
purchased Hardman’s Perth Basin assets under a Sale and Purchase
and an Option agreement.
Under the Sale and Purchase Agreement, Hardman has sold the majority
of its Perth Basin interests to ARC. The interests comprise the
following:
•10.376 per cent interest in EP 413, including the Jingemia
oil field;
•22.5 per cent interest in EP 368
•30 per cent interest in TP/15
•75 per cent interest in L4/L5/PL6 including the Woodada gas
field
•100 per cent interest in the Logue drilling rig
The consideration for these interests is a cash payment of A$7,644,000
plus potential future payments up to a total of $1,500,000 if production
from the Woodada Gasfield exceeds certain levels. Hardman’s
remaining 12 per cent equity in EP 413 (Jingemia) has also been
made subject to a put and call option arrangement such that Hardman
can require ARC to purchase the interest and ARC may require Hardman
to sell the interest to ARC for an agreed amount. Under the terms
of this agreement, ARC will acquire the interest no later June 2005.
The sale of the assets to ARC is conditional on required joint venture,
third party and regulatory approvals, however, under the sale and
purchase agreements, ARC has assumed effective control of the assets
as of today.
Commenting on the purchase, ARC’s Managing Director Mr Eric
Streitberg said: “This acquisition completes the current phase
of ARC’s carefully considered strategy of consolidating its
strategic position in the Perth Basin. With this purchase, ARC now
has interests in all of the producing fields in the North Perth
Basin and operates the majority of them. It has substantially diversified
both our oil production base with the additional equity in Jingemia
and our gas customer base with the purchase of the Woodada gasfield.
This purchase will also allow us to pursue our portfolio approach
to exploration more effectively.
The acquisition will be funded from a combination of cash on hand
and draw down of our $10 million working capital facility and is
forecast to be cash flow and EPS positive subsequent to the development
of the Jingemia oil field which is currently underway. We are delighted
to have been able to work with Hardman to complete this acquisition
in such a short time fram. We will now get down to the business
of adding value through the drill bit and enhancing the value of
the existing production businesses after a great year which has
seen us consolidate our position in the basin and deliver a series
of record profits.”
Commenting on the sale, Hardman’s Managing Director Mr Ted
Ellyard said: “Hardman is pleased to have achieved this rationalisation
of its Australian assets, which will enable the Company to focus
its efforts on those areas where maximum value can be added. Since
it acquired the original interests in the Perth Basin in mid-2001,the
Company has had a high success rate in discovering large oil and
gas reserves in offshore Mauritania. The recent sale of an interest
in Mauritania to British Gas shows clearly how the value of this
area can rapidly appreciate. Hardman needs to be able to direct
its technical and commercial resources to managing and further enhancing
this asset. In addition, the Timor Sea has recently come to the
fore as an area which Hardman believes has the potential to host
larger petroleum reserves than the Perth Basin, and is therefore
considered more suited to Hardman’s exploration style and
capabilities. This Perth Basin sale will free up manpower and increase
cash reserves to improve Hardman’s ability to take advantage
of opportunities in its Timor Sea acreage. The same applies to Hardman’s
large scale international exploration projects, some of which are
nearing the drilling stage where important technical and commercial
decisions need to be taken. Both parties will benefit from this
transaction, which has been largely possible because of the cooperative
relationship which has existed between the two companies for some
time. We consider ARC to be particularly well qualified to manage
and exploit these assets, and we wish them well in their future
Perth Basin exploration and production activities.”
For more information see www.hdr.com.au
Posted by Richard Price,
Editor Pipeline Magazine
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