News: UPDATE 1-Australia's Oil Search to buy oil assets in Alaska for $400 mln

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Nov 1 (Reuters) - Australian oil and gas explorer Oil Search (OSH) said on Wednesday it will buy stakes in oil assets in Alaska for $400 million from privately owned U.S. companies Armstrong Energy LLC and GMT Exploration Company LLC.

The purchase price for the Alaskan assets translates to $3.1 per barrel, Oil Search said.

The deal gives Oil Search stakes of 25.5 percent, 37.5 percent and 37.5 percent in three crude oil fields in the Alaska North Slope, with the option of increasing Oil Search's stake for an additional $450 million, the company said in a statement.

The company, which mainly operates in Papua New Guinea, said it would fund the deal from its existing cash reserves without an impact on its dividend policy.

Oil Search said it was in the process of creating a separate U.S.-based entity with U.S. oilfield services giant Halliburton Co and Armstrong Energy to operate the Alaskan assets, which the company will run mid-2018 onward.

The company already employs Halliburton's services at its Papua New Guinean assets.

Last month Oil Search reported a jump in third-quarter revenue on strong output from its Papua New Guinean liquefied natural gas (LNG) project, adding that output for the year would be at the top of its guidance range.

Oil Search shares were down 1.5 percent in morning trade, while the broader market was up 0.5 percent.