PA Resources (STO:PAR) (OSE:PAR) is divesting a 40% interest in License 12/06 in Denmark and a 56% interest in License B20008/73 in Germany to Dana Petroleum.
This divestment to wholly owned subsidiaries of Dana Petroleum plc is consistent with PA Resource’s earlier announced intention to dilute in these assets, in which PA will retain meaningful interests of 24% in License 12/06 and 34% in License B20008/73. Dana will assume operatorship shortly following completion in License 12/06 and prior to exploration drilling in License B20008/73. This transaction is subject to all necessary government and partner approvals.
License 12/06 contains two operated discoveries made by PA in 2011: the Broder Tuck gas condensate discovery, on which development feasibility studies are ongoing, and the Lille John oil discovery, on which an appraisal well is planned to be drilled in 2014.
Dana will refund its share of costs incurred by PA since Jan. 1, 2013, in addition to an initial payment of $9.25 million. Subsequently, PA will be carried for its share of joint venture costs up to a cap of $16 million net to PA’s interest, with an additional contingent development carry of $15 million net to PA’s interest, resulting in a total consideration of approximately $44 million. Dana will also join the PA-operated bidding group for the Danish 7th Licensing Round, anticipated to begin in early 2014.