MELBOURNE, Australia--Oil Search Ltd. (OSH.AU) has agreed to pay US$400 million for a stake in the prospective Alaska North Slope, estimated to be one of the largest conventional oil discoveries in the U.S. in decades.
The oil assets will complement Oil Search's portfolio of natural-gas assets in Papua New Guinea and balance a gas-dominated portfolio, the company said Wednesday.
The acquisition in Alaska, along with exploration and development costs, will be covered by existing cash and dedicated additional financing facilities, Oil Search said.
The assets will be bought from closely held Armstrong Energy LLC and GMT Exploration Company LLC, and include a 25.5% interest in the Pikka unit and adjacent exploration acreage and a 37.5% interest in the Horseshoe block. Oil Search has an option to buy all of Armstrong's and GMT's remaining stakes in Pikka and the Horseshoe area, plus interests in adjacent exploration acreage and 37.5% in the Hue Shale region, for US$450 million.
Oil Search said it will become operator of the assets from June 2018.
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(END) Dow Jones Newswires
October 31, 2017 18:51 ET (22:51 GMT)