Karoon completed the acquisition of interests in the US GoM from LLOG Exploration Offshore, LLC and LLOG Omega Holdings (collectively LLOG) on 21 December, Houston time. These include a 30% working interest in the Who Dat and Dome Patrol oil and gas fields and associated infrastructure, an approximately 16% working interest in the Abilene field and varying interests in adjacent exploration acreage. The effective date of the transaction is 1 October 2023.

On completion, Karoon paid US$684 million to LLOG (comprising the purchase price of US$720 million less a US$36 million deposit already paid)(1). In addition, payments totalling US$15 million were made in establishment and underwriting fees relating to the debt and equity processes. The closing payment was funded by a US$274 million drawdown on the Company’s US$340 million new debt facility, US$312(2) million raised from a fully underwritten equity issue and the balance from existing cash reserves.

Karoon has received the economic benefit of the 30% interest in the acquired assets since 1 October 2023. Cash flow net to Karoon between the effective date and completion was US$0.1 million, with funds generated from operations used to finance Karoon’s share of an infill development program which is currently underway.

Dr Julian Fowles, Karoon’s Managing Director and CEO said:
“We are delighted to have completed the Who Dat acquisition. This transaction is expected to be both value and earnings accretive for Karoon. The Who Dat and Dome Patrol fields are low cost producing assets with near and medium term expansion opportunities, located in a prolific, world class hydrocarbon basin in a stable and well understood regulatory and fiscal jurisdiction.

The transaction provides a number of strategic benefits to Karoon, including increased scale and both asset and geographic diversification. This long life producing asset, together with the appraisal and exploration opportunities, will also help offset the natural decline from the Baúna Project in Brazil.

We look forward to working closely with LLOG, a well respected and established offshore GoM operator, and the other joint venture partners to optimise the value of the Who Dat assets.”

(1) The acquisition also includes a combined carry of US$39.2 million on a 2 for 1 basis associated with the Who Dat exploration permits.
(2) The equity issue was completed based on an AUD/USD exchange rate of 0.65. The compares to the assumption of 0.625 in the ASX release dated 16.11.23 “Acquisition of Interest in GoM - Investor Presentation”.

KeyFacts Energy: Acquisitions & Mergers news