Beach closes sale of interest in Otway assets

Australia-based oil and gas company Beach Energy has completed the sale of an interest in the Otway assets offshore Australia to O.G. Energy.

Map of Victorian Otway interests; Source: Beach Energy

On October 5, 2018, Beach announced it had entered into an agreement to sell 40% of its Victorian Otway interests to O.G. Energy, through its wholly owned subsidiary OGOG (Otway) Pty Ltd, for $344 million with an effective date of July 1, 2018.

Following the satisfaction of all conditions, a completion payment of $262 million was received on Friday, May 31, 2019, comprising the purchase price of $344 million less adjustments of $82 million. These adjustments reflect O.G. Energy’s share of net cash flow from these assets between the effective date of the transaction and the completion date.

Following completion, Beach holds a 60% interest and remains as operator of its Victorian Otway interests, including the Geographe, Thylacine, Halladale, Speculant and Black Watch gas fields, Enterprise and Artisan exploration prospects and the Otway Gas Plant.

Additionally, Beach has agreed to transfer to O.G. Energy, for consideration and subject to customary regulatory approvals, a 40% interest in the La Bella gas field, ensuring alignment across its offshore Otway portfolio.

Commenting on the close of the Otway Sale, Beach Managing Director, Matt Kay, said: “We are excited to formally welcome O.G. Energy into our Victorian Otway Basin assets. Having a fully-aligned partner on board is an important step in Beach’s plans to develop more gas supplies for the east coast gas market.

“Completion of the transaction further strengthens Beach’s balance sheet. The company is in a strong financial position to consider accelerating investment in our value-accretive growth portfolio.”

O.G. Energy is the energy division of Ofer Global, a private portfolio of international businesses. O.G. Energy’s oil and gas division, O.G. Oil & Gas, holds the groups’ exploration and production interests, which are held through both direct participations, like the planned Otway joint venture, as well as through strategic shareholdings.

It is worth reminding that, earlier this year, Beach hired a Diamond Offshore-owned semi-submersible drilling rig to undertake its Victorian Otway offshore drilling program. The first well expected to be drilled in the offshore program will be the Artisan gas exploration well, which is located in the VIC/P43 permit.

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