Karoon Partners with Dea to Consider Acquisitions Offshore Brazil

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--Oil-and-gas explorer Karoon Gas Australia Ltd. (KAR.AU) has struck a deal to tie-up with an energy company controlled by Russian billionaire Mikhail Fridman to consider buying assets in selected areas off Brazil.

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In a statement Monday, the Australian company said it had entered agreements with German oil-and-gas company Dea to evaluate jointly bidding for assets.

As part of the arrangement, Karoon said it had granted Dea an exclusive option to buy up to 50% in five exploration blocks in the Santos Basin, off the coast of the state of Sao Paulo.

Having such a "high quality, well-capitalized partner" would significantly assist Karoon in its ambitions to buy oil production in Brazil, Karoon Managing Director Robert Hosking said.

Commercial terms for any acquisitions would be agreed and finalized at the appropriate time, Karoon said. A sale of interests in its exploration acreage, including in the Echidna and Kangaroo discoveries, remains subject to Dea carrying out due diligence and the agreement of terms, it added.

Mr. Fridman's L1 Energy, formed to invest heavily in energy assets around the world, bought Dea from German utility RWE AG (RWE.XE) in 2015.

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"DEA has excellent operational capabilities with significant production and earnings, along with ambitious growth strategy, making them a very good strategic fit for Karoon" Mr. Hosking said.

Karoon entered Brazil in 2008 with the acquisition of five exploration blocks.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

July 30, 2017 20:34 ET (00:34 GMT)