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PA Resources Announces Farm-out of Denmark & German Assets

Source: www.gulfoilandgas.com 12/16/2013, Location: Europe

PA Resources is divesting a 40% interest in Licence 12/06 in Denmark and a 56% interest in Licence B20008/73 in Germany to Dana Petroleum.

This divestment to wholly-owned subsidiaries of Dana Petroleum plc (“Dana”) is consistent with PA Resource’s (“PA”) earlier announced intention to dilute in these assets, in which PA will retain meaningful interests of 24% in Licence 12/06 and 34% in Licence B20008/73. Dana will assume operatorship shortly following completion in Licence 12/06 and prior to exploration drilling in Licence B20008/73. This transaction is subject to all necessary government and partner approvals.

Licence 12/06 contains two operated discoveries made by PA in 2011; the Broder Tuck gas condensate discovery, on which development feasibility studies are ongoing, and the Lille John oil discovery, on which an appraisal well is planned to be drilled in 2014.

Dana will refund its share of costs incurred by PA since 1st January 2013, in addition to an initial payment of USD 9.25 million. Subsequently, PA will be carried for its share of joint venture costs up to a cap of USD 16 million net to PA’s interest, with an additional contingent development carry of USD 15 million net to PA’s interest, resulting in a total consideration of approximately USD 44 million. Dana will also join the PA-operated bidding group for the Danish 7th Licensing Round, anticipated to commence in early 2014.

Mark McAllister, President and CEO, comments: “Following our earlier announced Tunisian transaction with Enquest, this transaction represents delivery by PA of the second significant divestment which was signalled in Q1 and with the Congo farm-out, the third important transaction this year. Again, PA has brought in on advantageous terms a highly competent and motivated operator to progress our operated discoveries through appraisal and potentially development. Dana has a long operating track record in the Netherlands where its nearest operated facility is the Hanze oil and gas field, only around 50km south of Licence 12/06. There are many geological similarities and operating synergies between Dana’s north Netherlands position and PA’s Danish and German assets and we look forward to working closely with Dana and our co-venturers to progress the exploration, appraisal and development of these assets.”

PA Resources was advised on this transaction by Jefferies International Limited.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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