Carnarvon Energy Ltd (ASX:CVN) is making strong progress towards finalising the divestment of a 10% interest in its Bedout Basin assets, situated 100 kilometres offshore in WA's Northwest Shelf, north of Port Hedland.
The Australian oil and gas company has entered into a binding agreement with OPIC Australia Pty Limited, a wholly owned subsidiary of CPC Corporation, Taiwan (CPC), Taiwan's national oil and gas company.
The transaction is poised to strengthen Carnarvon's financial position, as well as support the development of the nearby Dorado project.
To date, the majority of the conditions for completion have been satisfied, with the parties working towards completion mid-year.
Following completion, Carnarvon will hold cash of about A$178 million and an entitlement to a further A$129 million contribution towards its share of the Dorado development costs.
De-risk project funding
Carnarvon managing director and CEO Adrian Cook said: “I am extremely pleased with how the CPC transaction is progressing.
“Completion of this transaction is an important step in funding our share of the Dorado development.
“Following completion, Carnarvon will hold substantial cash and financial liquidity, enabling it to de-risk project funding in conjunction with prospective debt financing, which has received a strong level of market interest so far.
“Our team has been working closely with CPC since the start of this transaction and, along with the operator, we are all aligned on progressing the Dorado development to FID as soon as possible.
“With the Offshore Project Proposal having also recently been accepted, the joint venture has all the primary regulatory approvals required to support the development of Dorado, unlocking the significant value of this asset and the Bedout Sub-basin more broadly.”
Next steps
The transaction is subject to several customary conditions in respect of joint venture approval, approval by the Foreign Investment Review Board (FIRB) and approval and registration by the National Offshore Petroleum Titles Administrator (NOPTA).
Carnarvon is pleased to advise that the majority of these conditions have now been satisfied, with the parties working diligently to achieve the satisfaction of the final condition in a timely fashion.
The parties are continuing to target completion of the transaction mid-year, subject to the achievement of the final condition.