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PNG: Enterprise Energy Resources acquires interest in oil and gas assets in Papua New Guinea
25 Jan 2013
Enterprise Energy Resources has announced that in conjunction with an arm's length third party, the Company has acquired a 31.5% interest in Telemu No. 18 Ltd, a Papua New Guinea based subsidiary of LNG Energy for aggregate consideration of $4,000,000.
Telemu is the holder of four petroleum prospecting licenses ('PPL') in Papua New Guinea, PPL 319, PPL 320, PPL 321 and PPL 322, comprising a total of over 5.5 million acres and covering highly prospective territory for oil and gas exploration. PPL 319 lies in the lowland area of the Papuan fold and thrust belt in which a number of substantial oil and gas fields have been discovered and is on-trend with the Kutubu and Gobe producing oil fields owned by Oil Search Limited. LNG has identified a number of structural leads on PPL 319 through the use of recently acquired and processed 2D seismic.
Prior to the Transaction, the Company reorganized its formerly wholly owned British Virgin Island subsidiaries with the result that EERL (BVI) Holdings is now 50% owned by EERL (BVI) Ltd. (a wholly owned subsidiary of the Company) and 50% owned by the Third Party. Each party contributed $2,000,000 of equity capital to EERL Holdings.
In connection with the Transaction, EERL Holdings entered into an investment agreement with Telemu and LNG under which EERL Holdings paid Telemu $3,800,000, part of which was the subscription price for certain Telemu common shares and the balance of which was a non-interest bearing shareholder loan to Telemu. EERL Holdings also paid LNG $200,000 as consideration for the transfer to EERL Holdings of certain outstanding Telemu shares owned by LNG.
After giving effect to the investment, EERL Holdings acquired an aggregate of 31.5% of the outstanding shares of Telemu. Enterprise owns 50% of the shares of EERL Holdings, and therefore effectively holds a 15.75% interest in Telemu. Concurrent with the closing of the Transaction, LNG, EERL Holdings and Telemu entered into a shareholders' agreement to govern the operations of Telemu.
The Invested Funds will be used by Telemu to fund a 22km 2D seismic acquisition program on PPL 319 and for general operating expenses. The seismic program is expected to be completed in April, 2013.
Enterprise is a Canadian exploration and development company with oil and gas properties in Montana, USA and Papua New Guinea.
Source: Enterprise Energy Resources