ARC Energy Limited (“ARC”) and Hardman Resources Ltd (“Hardman”) are pleased to announce
that ARC has purchased Hardman’s Perth Basin assets under a Sale and Purchase and an Option
agreement.
Under the Sale and Purchase Agreement, Hardman has sold the majority of its Perth Basin interests to
ARC. The interests comprise the following:
· 10.376% interest in EP 413, including the Jingemia oil field;
· 22.5% interest in EP 368
· 30% interest in TP/15
· 75% interest in L4/L5/PL6 including the Woodada gas field
· 100% interest in the Logue drilling rig
The consideration for these interests is a cash payment of A$7,644,000 plus potential future payments
up to a total of $1,500,000 if production from the Woodada Gasfield exceeds certain levels.
Hardman’s remaining 12% equity in EP 413 (Jingemia) has also been made subject to a put and call
option arrangement such that Hardman can require ARC to purchase the interest and ARC may
require Hardman to sell the interest to ARC for an agreed amount. Under the terms of this agreement,
ARC will acquire the interest no later June 2005.
The sale of the assets to ARC is conditional on required joint venture, third party and regulatory
approvals, however, under the sale and purchase agreements, ARC has assumed effective control of
the assets as of today.
Commenting on the purchase, ARC’s Managing Director Mr Eric Streitberg said:
“This acquisition completes the current phase of ARC’s carefully considered strategy of
consolidating its strategic position in the Perth Basin. With this purchase, ARC now has
interests in all of the producing fields in the North Perth Basin and operates the majority
of them.
It has substantially diversified both our oil production base with the additional equity in
Jingemia and our gas customer base with the purchase of the Woodada gasfield. This
purchase will also allow us to pursue our portfolio approach to exploration more
effectively.
The acquisition will be funded from a combination of cash on hand and draw down of
our $10 million working capital facility and is forecast to be cash flow and EPS positive
subsequent to the development of the Jingemia oil field which is currently underway.
We are delighted to have been able to work with Hardman to complete this acquisition in
such a short time fram. We will now get down to the business of adding value through
the drill bit and enhancing the value of the existing production businesses after a great
year which has seen us consolidate our position in the basin and deliver a series of
record profits.”
Commenting on the sale, Hardman’s Managing Director Mr Ted Ellyard said:
“Hardman is pleased to have achieved this rationalisation of its Australian assets, which
will enable the Company to focus its efforts on those areas where maximum value can be
added. Since it acquired the original interests in the Perth Basin in mid-2001,the
Company has had a high success rate in discovering large oil and gas reserves in
offshore Mauritania. The recent sale of an interest in Mauritania to British Gas shows
clearly how the value of this area can rapidly appreciate. Hardman needs to be able to
direct its technical and commercial resources to managing and further enhancing this
asset.
In addition, the Timor Sea has recently come to the fore as an area which Hardman
believes has the potential to host larger petroleum reserves than the Perth Basin, and is
therefore considered more suited to Hardman’s exploration style and capabilities. This
Perth Basin sale will free up manpower and increase cash reserves to improve
Hardman’s ability to take advantage of opportunities in its Timor Sea acreage. The
same applies to Hardman’s large scale international exploration projects, some of which
are nearing the drilling stage where important technical and commercial decisions need
to be taken.
Both parties will benefit from this transaction, which has been largely possible because
of the cooperative relationship which has existed between the two companies for some
time. We consider ARC to be particularly well qualified to manage and exploit these
assets, and we wish them well in their future Perth Basin exploration and production
activities.”
SCOTT SPENCER
DIRECTOR
For further information please contact either:
Mr Ted Ellyard Mr Eric Streitberg
Managing Director Managing Director
Hardman Resources Ltd ARC Energy Limited
HDR
hardman resources limited
