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Oil Search to acquire Pac LNG

LNG Industry,

Oil Search has entered into an agreement to acquire the Pac LNG Group Companies (Pac LNG), which hold a 22.835% interest in Petroleum Retention Licence 15 (PRL 15), located in the eastern margin of the Papuan Basin in PNG. The present PRL 15 Joint Venture comprises InterOil Corporation (75.6114%), Pac LNG (22.8350%) and other interests (1.5536%).

Under the agreement, Oil Search will acquire the shares in Pac LNG for a consideration of US$ 900 million, payable at completion and contingent payments of US$ 0.775 per million ft3 for any certified 2C raw gas contingent resource within the Elk/Antelope fields greater than 7 trillion ft3, applied to Oil Search’s gross share before Government back-in.

The acquisition of Pac LNG is unconditional and expected to settle within 2 weeks. Oil Search has separately entered into a binding Heads of Agreement with the Pac LNG shareholders and other parties to undertake exclusive negotiations to acquire up to 100% of their interests in four permits.

These interests comprise 13.425% in exploration licences PPL 236 and PPL 238 and 11.0423% in PPL 237 and retention licence PRL 39 (which is expected to be granted soon), subject to the parties agreeing terms and satisfying any required third party approvals. PRL 39 contains the Triceratops gas discovery. The exclusivity period extends for a period of six months. The acquisition price for such licences remains to be negotiated between the parties.

The acquisition is in line with Oil Search’s strategy to aggregate gas resources to underpin LNG expansion opportunities in PNG and to develop those resources in the most capital efficient manner. The purchase also diversifies the Company’s portfolio and is highly complementary to Oil Search’s existing PNG assets and operating platform in PNG.


Adapted from press release by Ted Monroe

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