Golden Gate Petroleum Limited (“GGP”) (ASX:GGP) is pleased to provide the market an update on operational matters concerning all projects in Texas and Louisiana, USA.
Cutlass Project—Eagle Ford, Dimmit and La Salle Counties, Texas, Non-operator
The sale of GGP’s 10% working interest in the project has been successfully completed. GGP received US$1.7 million from existing partners including the partner who made the original offer and the working interest partners who elected to take up their preferential rights. Outstanding invoices were netted off the total sale price, however, there are expected to be some offset credits for the work conducted before the sale which will reverse out these payments made at closing.
While the project itself remained very attractive, our primary reasons for the sale were operational related. High cost overruns and delays preventing the initial well drilled over a year ago from going on production made the financial returns marginal. Ongoing partner disputes were also a concern.
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