Australian oil and gas producer Mosaic Oil NL
(ASX:MOS) has sold its wholly owned PNG subsidiary for US$11 million in cash.
The primary asset held by the subsidiary is a 28.57% interest in a permit which contains the Kimu gas discovery.
Mosaic says in addition to the cash payment it will also receive a contingent cash payment of either US$0.10 per gigajoule for any proven plus probable reserve increases prior to December 31,2012, or choose a firm, fixed amount of US$2.7 million in cash at any time before the appraisal well is drilled.
The company says the buyer is a major international oil and gas company who wishes to remain undisclosed.
CEO Alex Parks says the PNG asset was identified as being non-core to the company with an uncertain and very long-term commercial outcome if it were to proceed to development and production.
The company says the sale leaves Mosaic with a very solid cash position to fund activities in its Surat-Bowen, New Zealand and Cooper-Eromanga Basin acreage, opportunities it says offer nearer-term potential value for shareholders.
Mosaic Oil’s financial year 2009 profit was down on the year before.
