JOHANNESBURG (miningweekly.com) – ASX-listed Ambassador Oil and Gas has agreed to divest of a 52.5% interest in its South Australian permit to New Standard Energy in a deal valued at about A$42.5-million.
New Standard would operate the permit and carry the costs for a five-year programme, up to a maximum of A$42.5-million, to earn its 52.5% equity stake in the permit area.
The farm-in was part of a broader transaction for New Energy, which was also acquiring US-based Magnum Hunter’s Eagle Ford shale assets in the US.
Ambassador said on Tuesday that the deal superseded an earlier heads of agreement with Outback Energy Hunter, which carried an implied value of 16c per Ambassador share.
Outback Energy Hunter is also being acquired by New Standard Energy as part of its broader corporate transaction plan.
“The deal brings one of the world’s leading shale gas and oil explorers into the Cooper basin, while Ambassador retains a very large stage in the permit,” said CEO Tino Guglielmo.
He noted that shareholders could be pleased that one of the world's most experienced shale and oil gas explorers, Magnum Hunter Resources, would be applying its knowledge to assist in unlocking the value of the region.
New Standard’s first order of business would be to complete a large three-dimensional survey in 2014, followed by three subsequent wells which would hopefully unlock the potential of the Cooper basin.