26 May 2008
26 May 2008
In keeping with its strategy to monetize non core assets and focus on its New Zealand projects, Austral Pacific Energy Ltd. (TSX-V: APX; NZSX: APX; Amex: AEN) (Austral) is pleased to announce the sale of its interests in Petroleum Prospecting Licenses (PPLs) 235 and 261 in Papua New Guinea.
An agreement has been reached to sell APX's interest in the licenses to Foreland Oil Limited a subsidiary company of Rift Oil Limited (Rift) for $US 5 Million. Included in the agreement is Austral's 35% interest in the Coral Sea drilling rig and a dismissal of any and all claims or litigation between the companies.
The asset sale completes Austral's phased exit from PNG and affords a valuable cash injection which will be used to further reduce the company debt profile and support drilling activities at Cheal, Kahili and Cardiff.
Commenting on the agreement, Austral CEO and President Thom Jewell said, "The commercialization of gas resources is a major challenge in the PNG foreland basin. The company made a strategic decision to monetize its gas resources in the ground rather than pursue a significant capital spending program targeting a long term gas market. To accomplish this goal, Austral has been in negotiations with a number of companies and is pleased to be able to complete this transaction with Rift."
The decision to exit from PNG will allow Austral to continue to focus on its goals in New Zealand to increase production, more fully utilize the world class Cheal production station to reduce lifting costs. The company intends to build shareholder value through expanding the development of the Cheal field and pursuing upside potential of the Greater Cheal trend, Kahili and Cardiff.
Austral Pacific NZX Release
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