Saka Energi, Swift Energy closes US shale deal
Wednesday, July 16 2014 - 12:50 AM WIB
US firm Swift Energy Company closed on Tuesday its previously announced agreement with Indonesia?s PT Saka Energi Indonesia to fully develop 8,300 acres of Fasken area Eagle Ford shale properties owned by the former in Webb County, Texas.
Swift Energy said in a statement that it sold a 36 percent full participating interest in its Fasken properties to Saka for $175 million in total cash consideration, with $125 million (subject to adjustments for interim operations) to be paid at closing and $50 million in cash to be paid by Saka over time to carry a portion of Swift Energy's field development costs incurred after the January 1, 2014 effective date.
At closing, Swift Energy received approximately $147 million, composed of the initial $125 million cash consideration plus Saka's share of capital costs, net of revenue, since the effective date of the transaction, which capital costs include Saka's carry of a portion of Swift Energy's field development costs for that same period. After closing, approximately $38 million remains of Saka's original $50 million drilling carry obligation, which is expected to be fulfilled during calendar year 2016, the statement added.
The net proceeds received by Swift Energy in this transaction will be used initially to reduce the amount of borrowings under the company's credit facility and ultimately to use a portion of the proceeds to fund accelerated development of its Eagle Ford shale properties.
"This arrangement marks the beginning of a strategic partnership to grow production in the Eagle Ford dry gas window of South Texas," said Terry Swift, CEO of Swift Energy said.
Swift Energy Company, founded in 1979 and headquartered in Houston, engages in developing, exploring, acquiring and operating oil and gas properties, with a focus on oil and natural gas reserves onshore in Texas and in the inland waters of Louisiana.
Saka Energi was formed on June 27, 2011, as the upstream oil and gas subsidiary of PT Perusahaan Gas Negara (Persero) Tbk (PGN), Indonesia's largest natural gas transportation and distribution company, which is listed on the Indonesian Stock Exchange.
Editing by Reiner Simanjuntak