Mosaic, Cue sell PNG gas asset for $US16m

Australian-based oil and gas producers Mosaic Oil and Cue Energy have sold their interests in a Papua New Guinea (PNG) joint venture to an unnamed buyer.

The PRL8 permit contains the Kimu gas field and is operated by Oil Search PNG.

Wholly owned subsidiary Mosaic Oil Niugini, which holds 28.57% of PRL8, was sold for $US11m, and Cue subsidiary Omati Oil, with a 10.72% stake, was sold for $US5.14m.

The buyer, a major international, will remain anonymous until the transactions are completed in late July or early August.

Kimu was initially estimated at over 500 billion cubic feet of recoverable gas but was downgraded to an estimate of 270 billion cubic feet after remapping.

Mosaic chief executive Alex Parks said in a statement the “PNG asset... had an uncertain and very long-term commercial outcome”.

He indicated that funds from the sale would be directed towards the company’s activities in Taranaki and Queensland, “opportunities which offer nearer-term potential value”.

The Kimu retention licence is the only asset that ASX-listed Mosaic owns in PNG.

Dual listed Cue Energy will retain PNG interests in the producing South East Gobe and highly prospective Barikewa fields.

Profits from the Maari field in Taranaki helped drive Cue’s net profit to $A8.4m for the March quarter, after re-listing on the NZX in October 2009.

Shares (NZX:CUE) last traded at .32c.

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