Central Petroleum sells 50% share in Amadeus basin, Northern Territory

Central Petroleum Ltd., Brisbane, sold 50% of its producing interests in the Amadeus basin in the Northern Territory to New Zealand Oil and Gas Ltd. (NZOG) and Cue Energy Resources Ltd. for $85 million (Aus.) total consideration.

The deal includes 25% of Central’s Mereenie oil and gas field (OL4, OL5), 50% of Palm Valley gas field (OL3), and 50% of Dingo gas field (L7). Central’s Mereenie JV partner, Macquarie Group Ltd., remains a 50% interest holder in that field.

NZOG will take 70% of the acquisition while Cue (in which NZOG is a 50.04% interest holder) will take a 30% share.

Central Petroleum will retain 25% interest in Mereenie and 50% in Palm Valley and Dingo. It retains operatorship of the three fields.

NZOG and Cue will pay up-front cash of $29 million (Aus.) (NZOG $20.3 million; Cue $8.7 million); $40 million (Aus.) by way of carried funding for Central’s share of near-term development, appraisal, and exploration activities—including a committed two-well exploration program at Palm Valley and Dingo to begin this year —and $23 million (Aus.) (Central’s book value July 1, 2020) through an assumption of obligations to supply up to 4.9 petajoules of gas (NZOG and Cue’s 50% share) which has previously been paid for but not delivered under pre-sale take-or-pay arrangements.

There will be a completion adjustment for net cash flows generated from July 1 to the completion date.

Upon completion, NZOG will gain 14.5 MMboe (2P) resources and Cue will gain 4.4 MMboe (2P) resources.

Central’s share of 2P reserves in the Amadeus producing assets will be 75.6 petajoules of gas and 485,000 bbl of oil.

Central will retain its existing interests in the Range coal seam gas project in Queensland Surat basin permit ATP 2031; the EP 82 Dingo satellite area; EP115 including the Zevon subsalt prospect, and EP112 including the Dukas subsalt prospect.

The transaction, expected to close in this year’s third quarter, is subject to joint venture consents, shareholder approvals, and regulatory approvals including from Australia’s Foreign Investment Review Board.