New Guinea Energy Gets Nod to Sell 50% Stake in PNG Licence to Santos

New Guinea Energy’s wholly-owned subsidiary Kirkland has received notification that the final condition precedent for the sale of its 50 percent interest in Petroleum Prospecting Licence (PPL) 269 in Papua New Guinea to Barracuda (a subsidiary of Santos) has been met.

Under the terms of the sale and purchase agreement, once completion has taken place, Santos will acquire Kirkland’s 50% participating interest in PPL 269 in exchange for a total consideration of:

• payment of $32 million cash on completion;
• payment of $2 million cash if a Petroleum Retention Licence (PRL) is granted over any area of PPL269; and
• payment of a further $6 million cash if a Petroleum Development Licence (PDL) is granted over any area of PPL269. However, if a PDL is granted prior to a PRL, a one off payment of $8 million cash will be payable instead.

PPL 269 occupies an area of 8,995 km2 in the Western Province straddling both foreland and foldbelt structural terranes. South of the foldbelt elevations vary from 600 m in the Tarim area to 50 m in the southern part of the permit.

This licence has 5 drillable prospects and adjacent licences contain major wet gas discoveries including Hides (9.6 TCF GIIP), Juha (1.5 TCF GIIP) and Pnyang (1.2 TCF GIIP).

Further, NGE said it has received notification that the Minister for Petroleum and Energy has not granted the company the extension of its PPL 265 licence, which was applied for in August 2012.