Magellan Petroleum Completes Sale of Onshore Australia Assets
March 31 2014 - 6:00AM
Marketwired
Magellan Petroleum Completes Sale of Onshore Australia Assets
DENVER, CO--(Marketwired -
March 31, 2014) - Magellan Petroleum Corporation ("Magellan"
or the "Company") (NASDAQ: MPET)
today announced that on March 31, 2014 (the "Completion Date"), the
Company completed the transaction contemplated by the Share Sale
and Purchase Deed (the "Sale Deed") entered into with Central
Petroleum Limited ("Central") (ASX:
CTP), a Brisbane, Australia based junior exploration and
production company that operates one of the largest holdings of
prospective onshore acreage in Australia. The Company and
Central had previously entered into the Sale Deed on February 17,
2014 (the "Execution Date").
Pursuant to the terms of the Sale Deed, the Company received AUD
$15.0 million in cash on the Completion Date and will receive an
additional AUD $5 million in cash on or before April 15,
2014. On the Completion Date, the Company also received
approximately 39.5 million newly issued shares of Central stock,
equivalent to an approximate 11% ownership interest. Based on
the Central closing price on March 28, 2014, this stock represents
a total value of AUD $20.7 million, or a AUD $5.7 million, or 38%,
increase over the issuance value of AUD $15 million as determined
on the Execution Date. In addition, Magellan is entitled to
receive bonus payments from Central in the event that future gas
sales revenues from Palm Valley exceed certain
levels. Following Completion, the Company will wind down its
office in Brisbane, Australia, for expected annual savings in
general and administrative expense of AUD $2 million to AUD $3
million.
J. Thomas Wilson, president and CEO of the Company,
stated: "Completing this transaction is an important milestone
for Magellan. With AUD $20 million in cash proceeds and a
substantial reduction in general and administrative expenses,
Magellan should be in a very strong financial position to pursue
its strategy of proving up the value of its other assets and to
fund its operations. Furthermore, I'm excited that Magellan
will retain exposure to onshore Australia through a significant
ownership stake in Central, which we view as a long-term strategic
investment for our shareholders. Central is well placed to
realize incremental value from Palm Valley and Dingo. More
importantly, our shareholders can now benefit from the development
potential of Central's approximately 70 million acres in several
under-explored Australian basins prospective for unconventional
development. Although Magellan's primary focus will remain its
CO2-enhanced oil recovery ("CO2-EOR") project at Poplar, through
our ownership interest in Central and our acreage position in the
UK, we now also offer shareholders a compelling exposure to
multiple emerging large-scale unconventional plays."
CAUTIONARY INFORMATION ABOUT FORWARD LOOKING STATEMENTS
Statements in this press release, including forecasts or
projections that are not historical in nature, are intended to be,
and are hereby identified as, forward-looking statements for
purposes of the Private Securities Litigation Reform Act of
1995. The words "anticipate", "assume", "believe",
"budget", "estimate", "expect", "forecast", "intend", "should",
"initial", "plan", "project", and similar expressions are intended
to identify forward looking statements. These statements about the
Company may relate to its businesses and prospects, planned capital
projects and expenditures (including those relating to the Poplar
CO2-EOR project), increases or decreases in oil and gas production
and reserves, estimates regarding resource potential, revenues,
expenses and operating cash flows, and other matters that involve a
number of uncertainties that may cause actual results to differ
materially from expectations. Among these risks and
uncertainties are the following: the future value of Central's
stock; the successful implementation of the Dingo field; Central's
ability to develop its acreage; future gas prices realized at Palm
Valley and the timing and value of bonuses to be received from
Central on the basis of such prices; the variability of the
Company's estimates regarding annual savings in G&A expenses;
the technical and economic viability of CO2-EOR techniques at
Poplar; our ability to enter into a long term CO2 supply for our
Poplar CO2-EOR project; the value of our UK acreage position, the
uncertain nature of oil and gas prices in the United States;
uncertainties inherent in projecting future rates of production
from drilling activities; the uncertainty of drilling and
completion conditions and results; the availability and cost of
drilling, completion, and operating equipment and services; and
other matters discussed in the "Risk Factors" section of The
Company's most recent Annual Report on Form 10K and most recent
Quarterly Report on Form 10Q. Any forward-looking information
provided in this release should be considered with these factors in
mind. The Company assumes no obligation to update any
forward-looking statements contained in this report, whether as a
result of new information, future events, or otherwise.
ABOUT MAGELLAN
Magellan Petroleum Corporation is an independent oil and gas
exploration and production company primarily focused on the
development of a CO2-enhanced oil recovery ("CO2-EOR") program at
Poplar Dome ("Poplar") in eastern Montana. Historically active
internationally, Magellan also maintains exposure to the UK and
Australian oil and gas markets through the following assets: (i) a
large, mostly non-operated acreage position onshore UK in the Weald
Basin prospective for unconventional shale oil and gas production;
(ii) an exploration block, NT/P82, in the Bonaparte Basin, offshore
Northern Territory, Australia, which the Company currently plans to
farm-out; and (iii) an 11% ownership stake in Central Petroleum
Limited (ASX: CTP), a Brisbane,
Australia based junior exploration and production company that
operates one of the largest holdings of prospective onshore acreage
in Australia. Magellan is headquartered in Denver,
Colorado. The Company's mission is to enhance shareholder
value by maximizing the full potential of existing
assets. Magellan routinely posts important information about
the Company on its website at www.magellanpetroleum.com.
For further information, please contact: Matthew Ciardiello,
Manager, Investor Relations at 720.484.2404 or
IR@magellanpetroleum.com.
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