New Zealand Oil & Gas has increased its stake in the Mereenie field in Australia's Amadeus Basin by acquiring an additional 25% equity interest.
The deal includes an upfront payment of A$42.5m ($27.53m), with potential contingent payments of A$9m over the next two years, subject to certain conditions.
New Zealand Oil & Gas said the acquisition will increase its 2P reserves by 41% to 23mboe as of 1 July 2023.
The company's total reserves and production from the Mereenie field will effectively double because of this deal.
Macquarie Mereenie, the seller, has agreed to offload its entire 50% interest in the field. Horizon Oil is acquiring the remaining 25%.
New Zealand Oil & Gas initially entered the Mereenie field through a transaction with Central Petroleum in 2021.
Upon completion of the latest acquisition, New Zealand Oil & Gas will hold a 42.5% interest, Horizon Oil 25%, Central Petroleum (the operator) 25% and Cue Energy Resources 7.5%.
The Mereenie gas field, which reached peak production in 2007, has successfully recovered 88.99% of its total recoverable reserves.
According to GlobalData, projections based on current economic assumptions suggest that production will persist until the field's economic limit in 2030.
New Zealand Oil & Gas chief executive Andrew Jefferies said: “The Mereenie asset has been a consistent performer with development upside. Gas prices in Australia’s East Coast markets are strong because natural gas is needed for the low-carbon energy transition. We have secured gas sales agreements directly into that market.
“In addition to reducing emissions in the energy system, natural gas from Mereenie powers diverse processes: mining needed for EV [electric vehicle] and wind turbine manufacture; electrical plant to back-up variable wind and solar; cooking our Australia day prawns. We previously announced a memorandum of understanding to investigate helium recovery at the Mereenie gas plant.”
The deal is subject to customary closing conditions such as regulatory approvals.
In December 2023, New Zealand Oil & Gas secured a gas supply deal with Incitec Pivot Fertilisers to supply a total of 1.74 petajoules of gas from its Palm Valley joint venturers.
