The company said Thursday that the partnership aimed to grow and develop the assets to support a mid-scale liquefied natural gas project on the coast in Western Province.
The sale agreement covers the transfer of 40% of Horizon’s stake in PRL 4 containing the Stanley field, PRL 21 containing the Elevala and Ketu fields, and PPL 259.
Under the deal, Osaka will pay $74 million in cash on completion of the transaction plus a further cash payment of $130 million upon a final investment decision for an LNG project. It would also make potential production payments where in the event that threshold condensate production is exceeded.
Osaka also has the option to acquire 40% of Horizon’s equity in PPLs 372, 373 and 430 by paying a proportionate share of costs incurred.
Horizon halted trading on the Australian Securities Exchange earlier on Thursday, stating it was on the verge of a “potential material transaction involving an asset disposal”.
The company considered Osaka the strongly-preferred bidder during the sale process, having considerable LNG engineering capability and the ability to offtake and distribute substantive volumes of LNG.
“Our upstream expertise is a good fit with Osaka Gas' experience in the LNG business and their ability to offtake the product,” chief executive Brent Emmett said in a statement on Thursday.
“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, which will be a large and long-term contributor to value.”
The transaction remains subject to customary consents, regulatory approvals and the grant of the development licence for the Stanley field.
