Beach Energy Limited and O.G. Energy Holdings Ltd have entered into a binding agreement whereby Eyal Ofer’s O.G Energy will acquire 40 per cent of Beach’s Victorian Otway assets for $344 million in cash. Through the agreement, Beach will remain operator of the assets.
The Otway parcel includes the Otway Gas Plant, existing gas fields Geographe, Thylacine, Halladale, Speculant and Black Watch as well as exploration prospects Enterprise and Artisan.
Beach CEO Matt Kay said the transaction aligns perfectly with their ambitions.
“We are delighted to have O.G. Energy join us in our Victorian Otway assets,” Mr Kay said.
“This transaction introduces a fully-aligned partner to support the rapid exploration and development of our offshore Victorian acreage.”
“Securing an excellent development partner for the Otway gas fields is a pivotal step towards creating new supply to Australia’s East Coast gas market,” he commented.
As per Beach’s previous statements, the company intended to sell down their interest and will be applying the sales proceeds to reduce debt and fund a portion of their future capital expenditure program. It will also reduce Beach’s share of future expenditure in the Victorian Otway Basin.
Eyal Ofer, Chairman of Ofer Global said he is delighted to build a strategic partnership with Beach, a major player in one of the key regions they are focusing on.
“With this acquisition, we have acquired a cornerstone producing asset around which we intend to continue to build the portfolio and grow our presence in Australia and the region. We are excited at what the future holds,” Mr Ofer said.
“We look forward to working together with the Beach team both on this project and many other opportunities in the years to come.”
Interests involved in the sale:
- The Otway gas plant and all associated infrastructure and pipelines.
- VIC/L1(V) permit, covering the Halladale, Speculant and undeveloped Black Watch gas and liquids fields.
- T/L2 and T/L3 permits, covering the Thylacine gas and liquids field.
- VIC/L23 permit covering the Geographe gas and liquids field.
- VIC/P42(V) permit covering the nearshore Enterprise exploration prospect.
- VIC/P43 permit covering the offshore Artisan exploration prospect.
- Assignment of interests in Beach’s gas and liquids sale agreements, where possible.
The sale will be effective from 1 July 2018 and completion is subject to customary conditions, including FIRB approval. Completion is currently expected to occur Q3 FY19.
More information on this announcement can be found here.