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Karoon confirms oil talks in Brazil

31st March 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed Karoon Energy on Thursday confirmed it was in negotiations to potentially acquire a stake in the Atlanta oil field, in the Santos basin, offshore Brazil.

Karoon told shareholders that it had submitted a confidential, conditional, non-binding and incomplete offer to Brazil’s Enauta Energia S.A and has signed an exclusivity agreement to undertake due diligence and enter into confidential negotiations, in connection with potentially acquiring a 50% non-operated interest in the Atlanta oil field.

Karoon said that its entry into the exclusivity agreement, which is valid until the end of May 2022, is consistent with its announced strategy of seeking value-accretive, inorganic growth opportunities that can leverage off its existing position in Brazil.

The Atlanta oilfield has an estimated 2P reserve of 103.1-million barrels of oil equivalent, and Enuata started production through an early producing system in 2018. There have already been more than 15-million barrels of oil produced.

The full development system for the Atlanta field would include the drilling of additional wells, connecting to a 50 000 bbl/d capacity floating production and storage operation, and the bidding process for this facility is expected to conclude in early 2022.

“The Atlanta opportunity is just one of several opportunities Karoon continues to evaluate in line with this strategy in the normal course of business,” the company said in a statement.

The offer may be withdrawn or modified and does not oblige Karoon to proceed with the transaction.

Karoon has $334-million of available liquidity as at the end of December, current strong cash flows, a demonstrated ability to access debt financing and has other funding options also potentially available to it if a transaction were to ultimately proceed.

Edited by Creamer Media Reporter

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