Austral Announces PNG Asset Sale and Debt Reduction

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[{"type":"text","content":"\n\n\n\nWELLINGTON, New Zealand, March 25 /CNW/ -- Austral Pacific Energy Ltd.\n(TSX-V: APX; NZSX: APX; Amex: AEN) announces that it has signed an agreement\nwith Horizon Energy for the purchase of Austral's 28.92% interest in Papua New\nGuinea petroleum retention license (PRL) 4 and 10.7% interest in PRL 5. The\noffers are subject to the pre-emptive rights in the relevant joint venture\nagreement, which give the existing joint venture parties a 45 day period in\nwhich to take up an option to purchase a proportionate share of Austral's\ninterest on the same terms and conditions as the Horizon agreement.\n\n\nThe Company plans to use the proceeds of sale to accelerate loan\nrepayments under the Company's debt facility with Investec. The amount\noutstanding under the debt facility is US$18.65m. Under the arrangement,\nAustral will, using the proceeds of sale, along with other scheduled\nreductions and the set-off of funds being held in a reserve account, reduce\nthe company debt to US$11 million by May 31, 2008, a reduction of $7.5\nmillion.\n\n\nCommenting on the early repayment and asset sale, Company CEO Mr. Jewell\nsaid, "Now is a good time to reduce the company's debt profile, strengthen the\nbalance sheet, and retain its focus on the growth of production from our core\nassets including the Cheal field development, Kahili Gas Development and\nCardiff appraisal. To facilitate this, Austral has completed a review of its\ninventory of projects and will monetize non-core assets where the divestment\ncan take advantage of the value cycle of the asset and deliver economic value\nto the company." Mr. Jewell also said, "Austral has funding and plans in place\nto drill additional wells in the Cheal field in the second quarter of this\nyear."\n\n\nAdditionally Austral and the holders of $10 million in redeemable\npreferred shares convertible at $1.30 have agreed to swap those shares for an\nunsecured $10 million debenture with the same economic terms as the preferred\nshares. The preferred shares are currently carried within Austral accounts as\nlong-term debt under generally accepted accounting principles.\n\n\n Web site: http://www.austral-pacific.com\n Email: [email protected]\n Phone: Thom Jewell, CEO +64 (4) 495 0880 or\n Brad Holmes: +1 (713) 304 6962\n\n\nNone of the Exchanges upon which Austral Pacific'...

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