AWE sells part of Bass Basin portfolio and announces 5 cps special dividend

abarrelfullabarrelfull wrote on 01 Apr 2014 11:38

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AWE Limited (“AWE”) has agreed to sell an 11.25% interest in T/L1 and 2.75% interest in T/18P in the Bass Basin to Toyota Tsusho Gas E&P Trefoil Pty Ltd (“Toyota Tsusho”) for a cash consideration of A$80.125 million.

The transaction provides AWE with a more balanced asset portfolio, a very strong balance sheet, and considerable flexibility to fund its future growth projects.

As well as injecting cash into the balance sheet, the transaction also reduces the risk-exposure to the capital expenditure requirements for the BassGas Mid-Life Enhancement project (an additional saving of approximately A$40 million). After completion, AWE will retain a strong cash position (which was $140 million at end September, 2011), with no debt, and will have excellent long term cash flows from five cornerstone assets.

Based on the Company’s strong financial position, AWE is also pleased to announce the payment to shareholders of a fully franked special dividend of 5 cents per share.

Bass Basin Sale

Under the terms of the binding sale and purchase agreement executed by AWE and Toyota Tsusho, AWE will sell an 11.25% interest in T/L1 (which includes the Yolla gas and condensate field and its associated production infrastructure) and a 2.75% interest in T/18P (which includes
the Trefoil gas and condensate discovery) for a cash consideration of A$80.125 million (plus working capital adjustments at completion).

At completion, AWE will hold a 46.25% interest in T/L1 and a 44.75% interest in T/18P. These changes provide a better balance in the joint venture interests, whilst maintaining AWE’s strong voting position in the operation of the assets.

The sale price is equivalent to approximately A$7 million per percentage point interest in T/L1, valuing AWE’s remaining 46.25% interest at A$324 million (62 cents per share) and supporting AWE’s carrying value for the asset. The sale will have an effective date of 1 November, 2011, and is subject to standard approvals for a transaction of this type, including joint venture and governmental approvals. Foreign Investment Review Board approval has already been received for the transaction.

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