PERTH (miningweekly.com) – ASX-listed AWE has completed the $190-million sale of its 10% working interest in the Sugarloaf project, in Texas, to US-based Carrier Energy Partners.
The two companies in January agreed to the sale, with the proceeds to be used to repay debt drawn under AWE’s debt facility, and to substantially strengthen the company’s balance sheet.
MD and CEO Bruce Clement said on Thursday that the sale of Sugarloaf was a major step in reshaping AWE to grow sustainably in a low oil price environment.
“We have removed significant recurring capital expenditure and strengthened the company’s balance sheet through the Sugarloaf sale. We will repay all debt and anticipate being positive net cash at the end of March.”
In the short to medium term, AWE’s focus would be on low-cost, high-value gas assets with consumer price index linked contracts, Clement said.
“We are developing the first stage of the Waitsia gas field, in Western Australia’s Northern Perth basin, where AWE will become a low-cost producer. We are also focused on increasing sales revenue from east and west coast gas markets as we negotiate new gas supply contracts for the Waitsia, BassGas and Casino projects over the next two to three years.”
AWE in January this year made a final investment decision for the first stage of development for the Waitsia gas project. The A$17.5-million project would comprise the installation of new infrastructure and upgrades to existing assets, which would connect the recently flow-tested Waitsia 1 and Senecio 3 gas wells to the Xyris production facility.
Meanwhile, Clement pointed out that should oil prices recover, AWE also had a 50% interest in the undeveloped Ande Ande Lumut oil project, in Indonesia, where a final investment decision was expected by the end of the 2016 calendar year.