InterOil Corp. (NYSE:IOC) will increase its interest in two key licenses following the withdrawal of Pacific Exploration & Production Corp. from Papua New Guinea, according to a news release.
The withdrawal of Pacific, formerly Pacific Rubiales Energy Corp., is consistent with its strategy of focusing on Latin America, the release said.
As a consequence of Pacific’s withdrawal, InterOil will increase its interest in PRL 39, which contains the Triceratops discovery, and in PPL 475, which contains the Raptor discovery, the company said.
“We are pleased we will now own more than 78% of the Triceratops and Raptor discoveries,” said InterOil Chief Executive Michael Hession. “Pacific’s withdrawal simplifies license ownership for any commercialization discussions with other strategic players.”
Triceratops, PRL 39: Pacific’s right to withdraw from PRL 39 is in line with its July 2012 farm-in agreement in which Pacific acquired a 12.9032% gross interest in PRL 39 from InterOil and minority interest holders, according to the release.
On completion of Pacific’s withdrawal, InterOil’s gross interest in PRL 39 will increase from about 87% to 100%, and its gross interest in the Triceratops discovery will increase from about 69 % to about 78 %.
Raptor, PPL 475: With Pacific’s withdrawal from PPL 475, formerly PPL 237, InterOil’s gross interest will increase from about 87% to 100%, and its interest in Raptor will increase from about 66% to about 79%.
The 2012 farm-in agreement made certain provisions for Pacific to withdraw from the two licenses, including the right to receive a repayment of approximately $96 million from the net cash proceeds of the commercial sale of petroleum recovered or produced from PRL 15, the release said. The repayment of $96 million is to be made within six years from the date of withdrawal, with contributions of $66 million from InterOil and $30 million from minority interests, the release said.
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