Sona Petroleum to buy Stag Oilfield, offshore Western Australia, for RM215.2m

PETALING JAYA: Special purpose acquisition company Sona Petroleum Bhd has proposed to acquire 100% interest in the Stag Oilfield, offshore Western Australia, from Quadrant Northwest Pty Ltd and Santos Offshore Pty Ltd for RM215.2 million.

In a filing with Bursa Malaysia yesterday, Sona Petroleum said the proposed acquisition is intended to be its qualifying acquisition. The transaction is expected to be completed by the first half of 2016.

“The Stag Oilfield has potential development and exploration opportunities and, therefore, in a single transaction, Sona Petroleum will be able to enter the production, development and exploration stages of the upstream value chain,” it added.

The Stag Oilfield is expected to contribute positively to Sona group’s earnings upon completion of the proposed acquisition, the company said.

“Sona Petroleum believes that the Stag Oilfield is a viable investment for its qualifying acquisition as the proposed acquisition is expected to provide a target project internal rate of return of at least 15% per annum,” it added.

Sona Petroleum said the Stag Oilfield is a producing oilfield located in the Dampier sub-basin of the Carnarvon Basin, offshore Western Australia, and in a water depth of about 50m and is about 60km offshore.

The oilfield was discovered in 1993 and has been producing oil since 1998. The field life of the Stag Oilfield is expected to be until 2024 and the infill development is expected to prolong the life of the field up to 2030.

Sona Petroleum said the purchase consideration would be satisfied in cash and funded via its internal funds raised from its initial public offering held under a trust account (net of taxes payable) amounting to RM525.6 million as at Oct 30, 2015.

Trading in Sona Petroleum shares was suspended from 9am to 2.30pm yesterday. Its shares climbed sen, or up 1%, to 45.5 sen with 6.35 million units done.