The deal, which is expected to close in March, leaves AWE in a net cash position of $60 million (Aus.) after repayment of all debts. The company says it intends to recycle capital into ground-floor developments like the Waitsia gas development onshore Perth basin in Western Australia.
AWE acquired its 10% interest in Sugarloaf in 2010 and worked with operator Marathon Oil Corp. to develop the shale asset. However, with Sugarloaf now entering a more mature phase of production and development, AWE has decided the time is right for divestment and focus on the next project.
Waitsia achieved final investment decision in early January for Stage 1 development. Production will provide early cash flow from mid-2016.
Once the Sugarloaf sale is finalized, AWE will continue to focus on projects such as Waitsia, BassGas (Bass basin, Tasmania), and Casino gas (offshore Otway basin, Victoria), which are weighted to near-term production. AWE also is involved with undeveloped assets such as the Ande Ande Lumut oil project in the Northwest Natuna Sea offshore Indonesia.