Under the terms of the agreement, Tamarind will acquire all of the outstanding shares of AWE New Zealand and AWE Taranaki, which together own 57.5% of Tui, for $1.5 million. This includes the operatorship, assets, and inventory, AWE’s oil hedge book, and a working capital cash balance of $10.8 million. The deal is subject to customary consents from the New Zealand government and Tui joint venture.
The sale agreement has an effective date of Nov. 30, and is subject to purchase price adjustments at completion, which is anticipated in 1Q 2017.
David Biggs, CEO and managing director of AWE Ltd., said: “Tui has been an excellent production asset generating significant returns for AWE and our joint venture partners as well as substantial taxes and royalties for the New Zealand government.
“Following expressions of interest from a number of parties, AWE has opted to sell its interest in Tui to Tamarind because of their ability to maximize value from late life assets and their experience in decommissioning offshore oil projects.
“With Tamarind’s expertise, and further improvement in the oil price, Tui could potentially continue operating beyond 2019, which would benefit all stakeholders.”
Ian Angell, managing director of Tamarind, said that this project represents a foundational asset in the development of Tamarind and as an oil producer and partner in New Zealand.
The sale of Tui is expected to generate a non-cash profit after tax of around A$28 million ($21 million), subject to purchase price adjustments, and will reduce AWE’s provisions by about 33%.
The transaction marked the end of AWE’s program of divesting non-core and late life assets, the company said.
“The Tui sale is another important step in AWE’s transition from legacy production assets to new growth assets,” Biggs continued “Although we have sold the Tui project, New Zealand remains a component of AWE’s geographic strategy and we continue to evaluate opportunities in New Zealand.”
The Tui area oil fields comprise the Tui, Amokura, and Pateke fields which are located about 50 km (31 mi) off the coast of Taranaki, New Zealand, in PMP 38158. Production from each field is fed into the Tui gathering system and then into the FPSO Umuroa.
The joint venture partners in PMP 38158 are operator AWE Ltd. (via subsidiaries) 57.5%; New Zealand Oil & Gas (via subsidiaries) 27.5%; and Pan Pacific Petroleum (via subsidiaries) 15%.