RE: Central petroleum trading halt25 May 2021 08:24
ASX
ASX CODE: CTP
25 May 2021
ANNOUNCEMENT AND MEDIA RELEASE
CENTRAL SALE UNDERWRITES SIGNIFICANT INVESTMENT IN THE AMADEUS BASIN
Central Petroleum Limited (ASX:CTP) (“Central” or the “Company”) is pleased to announce it has entered into a binding agreement with New Zealand Oil and Gas Limited (NZX:NZO; ASX:NZO) (“NZOG”) and Cue Energy Resources Limited (ASX:CUE) (“Cue”) of which NZOG is a 50.04% shareholder, and certain of their respective wholly owned subsidiaries, (together, the “NZOG Entities”) to sell 50% of Central’s current working interest in its Amadeus Basin Producing Assets for total consideration valued at circa $85 million1 (the “Transaction”).
The assets being sold under the Transaction consist of 50% of Central’s interests in its producing assets in the Northern Territory, namely, Mereenie Oil and Gas Field (OL 4/5)2 (“Mereenie”); Palm Valley Gas Field (OL3) (“Palm Valley”); and Dingo Gas Field (L7)3 (“Dingo”) (the producing assets together, the “Sale Assets” or “Amadeus Basin Producing Assets”).
Highlights
• The Transaction comprises a sale of a 50% interest in Central’s share of the Sale Assets, with an effective date of 1 July 2020 in return for consideration comprising of:
o anupfrontcashpaymentof$29million;
o $40 million payment by way of “carried” funding for Central’s share of near-term development, appraisal and exploration activities, including a committed two-well exploration programme at Palm Valley and Dingo to commence this year;
o $23 million (Central’s book value at the effective date)4 through an assumption by the NZOG Entities of obligations to supply up to 4.9 PJ of gas (50% interest acquired at the effective date) which has previously been paid for but not delivered under pre-sale or ‘take-or-pay’ arrangements; and
o a completion adjustment for net cash flows generated between the effective date and the completion date.
• The Transaction is expected to complete in Q3 2021 with consideration value to be circa $85m to Central at the expected completion date1.
• The Transaction is expected to result in an after-tax accounting profit net to Central of circa $35-$40 million on the sale1
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