AWE Sells Stake in Two Gas Permits to India's HPCL

AWE Limited has agreed to sell an 11.25% interest in T/L1 (BassGas infrastructure & Yolla field) and a 9.75% interest in T/18P (Trefoil field) to Prize Petroleum Company Limited, a wholly owned subsidiary of India’s Hindustan Petroleum Corporation Limited (HPCL), for A$85 million.

The company will receive A$80 million upon completion of the sale with a further A$5 million deferred payment payable upon meeting the following conditions:

1. A$2.5 million on completion of the BassGas Mid Life Enhancement (MLE) project (drilling of two development wells and installation of gas compression);

2. A$2.5 million if the MLE project costs do not exceed an agreed threshold.

The effective date for the sale is 1 July 2013 and is subject to completion adjustments.  

At completion, AWE will hold 35% in T/L1 (BassGas/Yolla) and 35% in T/18P (Trefoil).

“Our remaining 35% interest in BassGas is an appropriate holding in this non- operated asset and, importantly, maintains our voting rights at a level that provides control over major investment decisions,” AWE’s Managing Director, Bruce Clement, said.

Clement added that AWE remains well positioned to take advantage of rising east coast gas prices where we note that a number of gas supply contracts were renegotiated towards the end of 2013 with oil linked pricing mechanisms and at higher base rates.

“The majority of AWE’s existing east coast gas supply contracts expire in 2017 and 2018 and we expect to commence marketing our uncontracted gas in the near future,” Clement said.

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