Australia's Carnarvon Energy completes Bedout divestment
Australian energy company Carnarvon Energy on August 16 announced the successful completion of its agreement to sell a 10% interest in its Bedout assets located offshore Western Australia to OPIC Australia, a subsidiary of Taiwan's CPC Corporation.
The deal, initially announced in February, involves a cash consideration of $146mn. The transaction comprises an upfront payment of $56mn upon completion. Additionally, once a Final Investment Decision (FID) is made for the Dorado development, Carnarvon is set to receive a carry of $90mn to cover its future expenditures in the Bedout permits.
With the transaction finalised, Carnarvon has received a payment of $58mn from CPC. The increased upfront payment amount is attributed to the adjustment process outlined in the sale agreement. The effective sale date was determined to be August 31, 2022.
As a result of this transaction, Carnarvon now holds approximately A$319mn in financial liquidity, which is composed of approximately A$181mn in cash and an additional A$138mn earmarked for Carnarvon's future contribution to the development costs of its Dorado project.
“Completion of the CPC transaction is a crucial funding milestone for Carnarvon and a key piece in the company’s transformational journey to delivering high-quality, low-cost production for shareholders,” CEO, Adrian Cook, commented. “Following receipt of an adjusted payment of $58mn (A$89mn) from CPC at completion, Carnarvon’s cash reserves now stand at A$181mn, with total financial liquidity of A$319mn.”
Carnarvon's Bedout assets include the WA-64-L production license, which holds the Dorado field, as well as several exploration permits. The sale of the 10% interest will result in a corresponding decrease in Carnarvon's ownership across all the assets.
Santos holds an 80% interest in the Dorado field and a 70% interest in the Pavo field, operating both of them. Earlier this year, Santos received regulatory approval for its Dorado oil and gas project. Dorado now has the primary regulatory approvals required to support development.
CPC, Taiwan's national oil and gas company, has already established itself as an investor in Australian oil and gas assets, with interests in projects such as the Prelude FLNG and Ichthys LNG. They have also successfully obtained FIRB approval for acquiring an interest in exploration permit WA-533-P from Japan’s Inpex.