Canada's Tag Oil to Divest Oz Assets
Canada’s Tag Oil has entered into a definitive agreement with Luco Energy to divest its Australian assets and operations as part of a strategic realignment of its activities, it said on October 14.
The deal involves the sale by Tag’s Australian subsidiary, Cypress Petroleum, which holds the company’s 100% working interests in PL 17, ATP 2037, and ATP 2038 located in the Surat basin of Queensland. Formal closing of the transaction is expected by the end of this year.
Once the deal is finalised, Tag will get a cash payment of A$2.5mn (US$1.8mn). Tag will receive a 3% gross overriding royalty on future production from all liquids produced from the permits. The deal will be funded from Luco's available financial resources.
“The company is continuing to assess various oil and gas acquisition opportunities of assets and/or companies in the initial focus area of the Middle East and North Africa that will provide value to shareholders,” Tag chairman Abby Badwi.