Oil Search has secured an agreement to acquire oil assets in Alaska from privately-owned companies, Armstrong Energy and GMT Exploration, for $US400 million ($522.4 million).
The Alaska North Slope assets in the United States include a 25.5 per cent interest in the Pikka Unit and adjacent exploration acreage, and a 37.5 per cent interest in the Horseshoe Block.
According to Oil Search, the leases contain about 500 million barrels in the Nanushuk and satellite oil fields, with Nanushuk being one of the largest conventional oil fields discovered in the US.
Oil Search believes the acquisition will provide the company with world-class oil assets immediately adjacent to existing infrastructure, while also complementing its portfolio in Papua New Guinea.
Peter Botten, Oil Search managing director, said the company had been seeking to acquire oil interests to complement its PNG assets.
“The key challenge has been to achieve this without diluting the company’s world class, high returning PNG assets,” Botten said.
“Utilising our existing relationships, this Alaska North Slope opportunity has been proactively pursued and an agreement structured to the benefit of all parties.”
Oil Search, which expects to take operatorship of the assets in June 2018, plans to fund the deal through existing cash flow and new financing.
The company also has an option to purchase Armstrong and GMT’s remaining interests in the Pikka Unit and the Horseshoe Block, as well as an additional 25.5 per cent share in the adjacent exploration acreage and 37.5 per cent in the Hue Shale, for $US450 million.