The sale is similar to an earlier deal, effective June 1, 2007, in which Beach sold a 10% interest in the Basker-Manta-Gummy (BMG) project. The agreement with Sojitz remains subject to the usual government approvals, the pre-emptive right of the other joint venture participants and other conditions precedent typical in this type of transaction.
Beach Petroleum will retain a 30% equity share in the BMG project. The effective date of the transaction is December 31, 2007, and is expected to have a material positive impact on Beach’s profit result for the six months ended December 31, 2007.
The BMG project was developed to initially produce oil from the Basker and Manta fields, based on initial proved and probable (2P) reserves estimates of about 23 million barrels (MMbbl). But new wells drilled in 2006 expanded the reserves base with 2P oil reserves standing at nearly 40MMbbl.
Reg Nelson, Beach Petroleum’s managing director, said: We are delighted to welcome Sojitz as a participant in the project. We believe that Sojitz will add significant technical and financial strength to the joint venture.
