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TAG Oil to Acquire Surat Basin Assets from Southern Cross

Source: www.gulfoilandgas.com 10/31/2016, Location: Not categorized

Oil and gas exploration and production company, TAG Oil Ltd. (TAG), is pleased to announce that its wholly owned Australian subsidiary, Cypress Petroleum Pty Ltd. (Cypress), has entered into a definitive asset purchase agreement (the “Definitive Agreement”) with Southern Cross Petroleum & Exploration Pty Ltd. (Southern Cross), to acquire a 100% interest, subject to underlying royalties, in Petroleum Lease 17 (PL 17) and all related assets, which are located in Australia’s Surat Basin. The Definitive Agreement is subject to certain conditions, including obtaining all necessary government approvals.

Transaction Highlights

TAG will acquire a 100% right, title and interest in PL17 and all related assets for consideration of AUD$2,500,000, payable to Southern Cross as follows:

- AUD$750,000 (less the AUD$40,000 non-refundable deposit already paid) payable in cash on the closing date;
- AUD$500,000 payable in cash on July 20, 2017;
- AUD$500,000 payable, at the sole discretion of Cypress, in cash or satisfied by shares of TAG, on the second anniversary of the closing date; and
- AUD$750,000 payable, at the sole discretion of Cypress, in cash or satisfied by shares of TAG, on the third anniversary of the closing date.

PL 17 Highlights

PL 17 covers 104 km2 (25,700 acres) in the Surat Basin, which is one of Australia’s oldest producing basins, and is approximately 20 km away from the Moonie Oil Field that has produced ~25 mmb to date. Two fields, Bennett and Leichhardt, are located within the permit and have produced intermittingly from the Permian formation since being discovered in the 1960’s, with current production from the Bennett field of approximately 15 b/d of light oil. The Permian oil play is the primary conventional play opportunity within PL 17, and a work program is being designed to enhance the understanding of the reservoir’s properties.

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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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