Kuwait Energy signs Sales and Purchase Agreement with Beach Energy
Kuwait Energy Company, one of the fastest growing independent oil and gas exploration and production companies in the Middle East announced that as part of its ongoing portfolio management it has entered into a Sale and Purchase Agreement with Beach Energy Limited for the partial divestment of two Kuwait Energy assets in Egypt, Abu Sennan and Mesaha concessions.
Press Release
August 4, 2010
04 August 2010 Kuwait Energy Company, one of the fastest growing independent oil and gas exploration and production companies in the Middle East, today announced that as part of its ongoing portfolio management it has entered into a Sale and Purchase Agreement with Beach Energy Limited for the partial divestment of two Kuwait Energy assets in Egypt, Abu Sennan and Mesaha concessions. Kuwait Energy will remain the majority holder and operator of Abu Sennan concession.
Kuwait Energy's portfolio management is designed to ensure the optimum mix of exploration, development and production assets and the maintenance of appropriate levels of risk in individual assets. Central to this strategy is the flexibility to reduce stakes and/or permit farm-ins, on a case-by-case basis, to maintain an appropriate balance.
The transaction will reduce Kuwait Energy's equity stake in the Abu Sennan concession, where the company is operator, from 72% to 50%, and from 30% to 15% in the non-operated Mesaha concession. The Abu Sennan concession is located approximately 300km West of Cairo, and Mesaha concession is located in the south of Egypt, close to the Sudanese border.
The divestment, which is subject to customary regulatory approvals, including the endorsement of the Egyptian Government, brings the following benefits to Kuwait Energy:
Enables Kuwait Energy capital expenditure to be more aligned with its target ratio of 80:20 between producing/developing assets and exploration assets
Reduces Kuwait Energy's share of exploration expenditure commitments, in particular in the six-well commitment at Abu Sennan
Kuwait Energy Deputy Chairman and CEO Sara Akbar said: "The transaction brings the company's portfolio more into line with Kuwait Energy's long term plans for growth. The transaction also shows that Kuwait Energy is committed to obtaining value on all its assets at whatever stage of the business. Whilst we have reduced our ownership in Abu Sennan, we remain as operators of the concession and look forward to commencing exploration drilling in the later part of this year as the block contains many attractive prospects and already contains an undeveloped oil discovery."
Below is the new ownership structure in each concession following the divestment, subject to pre-emption rights and all regulatory approvals:
