AWE Ltd. has entered an agreement to sell its 42.5% interest in the Bulu PSC to a 100% owned subsidiary of HyOil Pte. Ltd. for cash consideration of up to A$27.5 million (US$20.5 million), AWE said in a news release.
The deal is subject to Indonesian government approval and is part of the company’s efforts to divest non-core assets to recycle capital into high value growth projects.
Located offshore east Java, the Bulu PSC includes the undeveloped Lengo gas project. According to the release, the transaction is structured in two tranches:
- A $15 million (US$11.1 million) up-front cash payment following the receipt of Indonesian government approval for the transfer of ownership; and
- An additional cash payment following the execution of a gas sales agreement (GSA) of a $5 million if the contract gas price is at or exceeds US$5.50/mmbtu, plus a further A$7.5 million if the contract gas price is at or exceeds US$7.65/mmbtu.
AWE said it will receive a cash deposit of A$1.5 million (US$ 1.1 million). The effective date is April 1, the release said.
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