Highlights
- Conditional acquisition of a further 25% interest in the Mereenie gas field, Amadeus Basin, NT, Australia
- Doubles Mereenie 2P Total reserves and increases NZO's net 2P Total Reserves by 41%
- Upfront payment of A$42.5m, to be adjusted for revenues and costs from 1 April 2023, and further contingent payments of up to A$9m
- 100% vendor debt facility of up to A$63m covers all purchase and transaction costs, with additional availability to fund development activity
New Zealand Oil & Gas has agreed to purchase from Macquarie Mereenie a further 25% equity interest in the Mereenie licenses, located in the Amadeus Basin in Australia's Northern Territory.
It will increase total 2P Group reserves by 41% to 23mmboe as at 1 July 2023. The acquisition will double the New Zealand Oil & Gas Group’s reserves and production from the Mereenie field.
The reserves indicated are for New Zealand Oil & Gas Group which includes Cue Energy Resources Ltd 7.5% interest, New Zealand Oil & Gas has a 50.04% interest in Cue.
Macquarie Mereenie Pty Limited has agreed to sell its entire 50% interest in Mereenie. In addition to the 25% acquired by NZO, Horizon Oil Limited (HZN) will acquire the remaining 25%. On completion, the participating interests will be:
- New Zealand Oil & Gas 42.5%
- Horizon Oil 25%
- Central Petroleum (Operator) 25%
- Cue Energy Resources (Cue) 7.5%
Including Cue’s 7.5% interest, the New Zealand Oil & Gas Group’s interest in Mereenie is 50%.
New Zealand Oil & Gas will make an upfront payment of A$42.5 million for the asset, plus further contingent payments of A$9 million over the next 24 months subject to certain conditions being met. The upfront payment will be adjusted for working capital and cashflows from the effective date of the agreement, 1 April 2023.
Macquarie Bank will provide vendor financing for 100% of the purchase price (including contingent payments), third party transaction costs and future development activity up to a total debt of A$63 million. Utilisation of the full debt facility will be determined by the scope of as yet, uncommitted development activity. The 7-year debt facility is secured by all New Zealand Oil & Gas Amadeus Basin assets. It may be repaid, redrawn or cancelled in whole or part.
New Zealand Oil & Gas acquired its initial interest in the Mereenie field from Central Petroleum in a transaction agreed in 2021.
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Source: NZOG
