PTTEP to spend $ 490 mm for Pogo assets

PTT Exploration & Production, Thailand’s second-largest gas producer, said it will spend $ 490 mm to buy stakes in oil and natural gas fields in the southeast Asian country owned by Houston-based Pogo.
PTTEP Offshore Investment will buy 59.9 % of the assets Pogo owns in Thailand, PTT Exploration said. Tokyo-based Mitsui Oil Exploration will buy the remaining 40.1 %, it said.

PTT Exploration has increased spending on exploration of oil and natural gas in Oman, Iran, Bahrain and other countries to boost its reserves as energy prices surge to records. Crude oil in New York rose above $ 59.18 a barrel for the first time amid concern producers may strain to meet demand.
”The acquisition is positive in terms of exploration risk, because Pogo’s main oil field is already operating,“ said Rutsada Tweesaengsakulthai, an analyst at Phillip Securities (Thailand). ”The field also has high potential because it started production just a few years ago.“

The purchase will increase PTT Exploration’s natural gas and crude oil production by 18 % or 27,000 bpd, company President Maroot Mrigadat said.
”The company will be able to realize an immediate revenue stream from petroleum sales, increased petroleum production and proved reserves,“ said Maroot.
Mitsui Oil, 44.4 % owned by Mitsui, Japan’s second-largest trading company, will pay about $ 328 mm for its stake in Pogo’s Thai assets, the Tokyo-based company said. Japan’s trade ministry holds 20 % of the oil exploration company.

The main asset of Pogo’s Thaipo unit is its 46.3 % stake in the B8/32 oil field in the Gulf of Thailand. The field has crude oil production of 59,200 bpd and daily natural gas output of 240 mm cf. It also owns the 9A block which is under exploration and hasn’t yet started production, PTT Exploration said.
The acquisition will be completed once other partners in Pogo’s fields approve the purchases, the company said. San Ramon, California-based Chevron operates both fields.

Crude oil for July delivery rose as much as71 cents, or 1.2 %, to $ 59.18 on the New York Mercantile Exchange, the highest since the contract began trading in 1983. It was at $ 59.06 at 1:32 pm Singapore time. Prices are 56 % higher than a year ago.
Pogo said on June 17 it agreed to sell its assets in Thailand to subsidiaries of PTT Exploration & Production and Mitsui for $ 820 mm to fund possible acquisitions. The US oil and gas explorer wants to raise money to develop fields and make acquisitions.

Pogo said on June 7 it agreed to sell its wholly owned subsidiary, Pogo Hungary, to Dallas-based Toreador Resources for about $ 9 mm.
Proceeds of asset sales would be invested in ”attractive domestic opportunities,“ Pogo said on Jan. 25.