TAG OIL SELLS NEW ZEALAND ASSETS AND OPERATIONS
Tag Oil along with certain of its subsidiaries in New Zealand, has entered into a definitive share and asset purchase agreement with Australian-based Tamarind Resources and certain of its subsidiaries.
This arm’s length transaction is for the sale of substantially all of TAG’s Taranaki Basin assets and operations in New Zealand. The sale will include TAG’s 100% working interests in: PMP 38156 (Cheal and Cardiff), PMP 53803 (Sidewinder), PMP 60454 (Supplejack), PEP 51153 (Puka), PEP 57065 (Waitoriki) and TAG’s 70% interest in PMP 60291 (Cheal East) and PEP 54877 (Cheal East) (collectively, the “NZ Assets”). Formal closing of the Transaction is expected in calendar Q1 2019, depending on timing of regulatory approvals.
• Cash payment to TAG of US$30 million at closing.
• TAG to receive a 2.5% gross overriding royalty on future production from all NZ Assets.
• Up to US$5 million in event specific payments payable on achieving various milestones (first milestone, grant of PMP 60454 (Supplejack) conversion, has already been achieved triggering payment of US$500,000 at closing).
• The Transaction will be funded from Tamarind’s available financial resources.
Commenting on the Transaction, Toby Pierce, CEO of TAG said, “We are very pleased to announce this transaction for TAG’s New Zealand assets, which presents an attractive premium to the current market value of the assets for TAG shareholders. Further, the royalty and event specific payments provide continued exposure to future upside from the assets and Tamarind’s aggressive capital program.”
Following completion of the Transaction, TAG expects to have over C$0.50 per share in cash and working capital, continued exposure to the current operations and upside of the NZ Assets. Additionally, TAG will be in a better position to pursue its exploration prospects covering over 275,000 net acres in Australia, including the producing 25,000-acre petroleum mining license in the Surat Basin.
TAG Oil based in Vancouver, is an international oil and gas explorer with established high netback production, development and exploration assets, including production infrastructure in New Zealand and Australia. (Source: Tag Oil – Image: Horizon Energy Services/Tag oil site in the Teranaki Basin, New Zealand)