New Guinea Energy Ltd. (NGE) and its wholly owned subsidiary Kirkland Ltd. have signed an agreement with a subsidiary of Santos Ltd., Barracuda Ltd. (Santos), regarding the proposed sale of Kirkland’s 50% participating interest in Petroleum Prospecting License 269 (PPL269) in Papua New Guinea (PNG) to Santos for a maximum total consideration of up to $40 million.
NGE CEO Grant Worner commented, “This transaction is consistent with NGE’s strategy of monetizing 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. This upside is dependent on the success of experienced oil and gas companies in PNG through bonus payments on the grant of a PRL or PDL in respect of PPL269 and PPL277 and an uncapped royalty over any production from PPL277. When the sale of Kirkland’s interest in PPL269 completes, the $32 million will significantly strengthen NGE’s balance sheet and provide capital to further progress our exploration opportunities.”