Karoon Gas Australia entered into a binding sale and purchase agreement for Pacific E&P Corp.’s 35% equity interest in the jointly held Santos Basin exploration blocks S‐M‐1037, S‐M‐1101, S‐M‐1102, S‐M‐1165 and S‐M‐1166, offshore Brazil, for up to US$20.5 million.
The agreement to acquire the 35% interest follows Pacific’s application for insolvency protection with the Superior Court of Justice in Ontario, Canada during April 2016.
Under the terms of the agreement, the consideration is payable by Karoon as follows: an upfront cash payment of $15.5 million payable on completion; and a deferred contingent payment of $5 million payable upon first production reaching a minimum of 1 MMboe from the blocks.
The agreement remains conditional upon, among other things, approval from the Petroleum Regulator, the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis and an approval order from the Superior Court of Justice in Ontario.
”The acquisition of Pacific’s interest in the blocks maps a clear path forward for Karoon to introduce a new funding partner to progress the Echidna discovery appraisal drilling campaign,” Robert Hosking, Karoon managing director said.