Sona Petroleum Berhad revealed Friday that Malaysia’s Securities Commission has approved its planned acquisition of the Stag Oilfield in Production License WA-15-L offshore Western Australia, the company said in a filing on local stock exchange Bursa Malaysia.
The Securities Commission (SC) however noted that independent technical and asset valuation expert Gaffney, Cline and Associates (Consultants) Pte. Ltd. has indicated in its Jan. 20 valuation report that the purchase price for Stag Oilfield was “not fair” as it was above the fair market value .
“The Company is currently in negotiations with the sellers of the Stag Oilfield to reduce the purchase consideration for the Proposed Acquisition,” Sona Petroleum said in the filing.
It added that “where the difference between the transaction price and the fair value range will not necessarily make the proposal detrimental to the interest of investors, the SC may allow shareholders to decide on whether to proceed with the transaction, provided all the required information is communicated fully and appropriately.”
When the proposed acquisition is completed, Sona plans to further develop the Stag Oilfield, which has been in production since 1988, to increase its output. This is to be achieved through, among others, the drilling of infill production wells, comprising the addition of new wells to the existing fields within the original well patterns to accelerate recovery of oil.
Oil from the field is currently produced from horizontal wells and processed through a fixed central production facility platform with 50,000 barrels per day capacity. It is then transported by pipeline to the floating storage offloading (FSO) facility and loaded to shuttle tankers for North Asian customers.
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