Last checked at 
(Alliance News) - Jadestone Energy Inc said Monday it agreed to buy a majority stake in an offshore oil project project in New Zealand for USD50 million from OMV New Zealand Ltd.
OMV New Zealand - a subsidiary of Austrian oil & gas firm OMV - will sell Jadestone a 69% stake in the Maari shallow water project for USD50 million. Jadestone will fund the acquisition using existing cash resources.
Jadestone said Maari is a mid-life project which is currently producing 4,000 to 4,500 barrels of oil per day based on a net 69% basis. The project - which has been producing since 2009 - holds 2P reserves of 13.9 million barrels of oil.
"I'm delighted to establish a new operating presence in New Zealand and to begin building relationships with local regulators, communities, staff and other stakeholders," Chief Executive Officer Paul Blakeley said. "Adding the Maari Project to our growing portfolio of high-value assets in the Asia Pacific region demonstrates our ability to bolt on new assets and provides more than a decade of additional free cashflow, even in the 2P reserves only scenario, as supported by our external reserves audit."
"We are excited by the opportunity to deploy our expertise to managing this mid-life producing asset, particularly as we see significant reserves upside," Blakeley added. "The Maari Project has achieved very modest recovery factors to date, relative to the substantial estimated original oil in place, making this an ideal platform to showcase our differentiated technical capabilities."
"The acquisition is immediately accretive to shareholder value and will be funded entirely with cash on hand," Blakeley continued.
Shares in Jadestone were 9.2% higher at 69.05 pence in London on Monday.
By Ahren Lester; ahrenlester@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
