The purchase price includes $74 million in cash on completion, another $130 million in cash should a final investment decision be taken on an LNG project, plus potential production payments once threshold condensate production is exceeded.
The assets being sold to Osaka Gas are 40% of Horizon's interest in the Stanley field in PRL 4, the Elevala and Ketu fields in PRL 21, and PPL 259. Osaka Gas will also be given an option to acquire 40% of Horizon's stakes in recently acquired PPLs 372, 373 and 430.
Horizon currently holds 50% of Stanley and 45% of Elevala and Ketu, where its partners are Canada's Talisman Energy, Japan's Mitsubishi and local company Kina Petroleum. The company's net certified reserves and contingent resources in PNG's Western province total 125 million barrels of oil equivalent.
The partners plan to develop the assets via early condensate production, and local gas and LPG sales. They will market their respective shares of the project's potential LNG production on a joint basis, Horizon said.
"Our upstream expertise is a good fit with Osaka Gas' experience in the LNG business and their ability to offtake the product," said Horizon CEO Brent Emmett. "They will add significant value to our already strong joint ventures and the strategic relationship will allow Horizon Oil to play its part and participate in a substantive mid-scale LNG development."
Osaka Gas is Japan's second-largest gas company and has about 7 million natural gas customers in the Kansai region. The company imports more than 8 million mt/year of LNG, or about 10% of Japan's total.
Completion of the deal is conditional on usual consents and regulatory approvals and grant of the development license for Stanley field.
