PXP unit takes new partner for project
A PERUVIAN unit of a company controlled by PXP Energy Corp. has taken on a new partner in an offshore exploration project in Peru, the Philippine-listed company told the stock exchange on Wednesday.
PXP Energy cited a disclosure by Karoon Gas Australia Ltd., which announced the farm out of a 35% interest in offshore exploration Bock Z-38, Tumbes Basin Peru to Tullow Peru Ltd., a wholly owned subsidiary of Tullow Oil plc.
Pitkin Petroleum Peru Z-38 SRL, a wholly owned subsidiary of Pitkin Petroleum Ltd. (PPL), holds a 25% participating interest in Peru Block Z-38. PXP Energy holds a 53.43% interest in PPL.
KEI (Peru Z38) Pty Ltd., Sucursal del Peru holds a 40% interest in the offshore exploration joint venture.
“Karoon is excited to welcome a partner with such a long and successful exploration track record into Peru. Tullow is a company, like Karoon, that recognizes the importance of high- impact offshore exploration as a core driver of a company’s future value,” said Robert Hosking, managing director of Karoon, in a disclosure to the Australian Securities Exchange.
Under the farm-out agreement, Tullow will acquire a 35% interest in the block by funding 43.75% of the cost of the first exploration well, capped at $27.5 million at 100%, beyond which Tullow will pay its 35% share.
Tullow is also to pay $2 million upon completion with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro.
The agreement remains subject to the satisfaction of certain licensing conditions and regulatory approvals, the Karoon announcement said.
“Following completion of the farmout well, Tullow will have an option to assume operatorship of the block,” it said.
Block Z-38 is located in the Tumbes Basin, next to the oil producing Talara Basin.
“Historically offshore Peru has experienced only limited exploration activity, however 2017 has seen a resurgence of interest and inflow of industry capital looking to test Peru’s exciting offshore potential,” Karoon added.
On Wednesday, shares in PXP Energy slipped 0.76% to P7.84 each. —