Stock Update (NASDAQ:MPET): Magellan Petroleum Corporation Sells Mereenie Bonus Rights
Magellan Petroleum Corporation (NASDAQ:MPET) announced the sale to Macquarie Bank Limited of all the Company’s rights to certain bonus payments related to the Mereenie field located in the Amadeus Basin in Australia for a purchase price of AUD $3.45 million.
On May 18, 2016, Magellan entered into and completed a Sale and Purchase Deed with Macquarie to sell to Macquarie all the Company’s rights to certain bonus payments, which bonus payments are i) based upon sales of hydrocarbons from the Mereenie field ranging from 2,500 boepd to 10,000 boepd and ii) may range from AUD $5.0 million to cumulative potential payments of AUD $17.5 million (the “Mereenie Bonus”) for a purchase price of AUD $3.45 million.
J. Thomas Wilson, President and CEO of the Company, commented, “This transaction represents another important step in the strategic alternatives review process we are engaged in and should provide sufficient liquidity to complete this process. We believe that the purchase price is attractive to the Company in light of i) the current estimated production from Mereenie, which the Company believes is less than 1,000 boepd, ii) the structure of the Mereenie Bonus, which require sales of hydrocarbons from the Mereenie field to attain 10,000 boepd in order to trigger the final bonus payment of AUD $10 million out of the cumulative potential payments of AUD $17.5 million, iii) the uncertainties related to the timing and financing of a development plan of Mereenie to enable increased production from the field, and iv) the uncertainties related to the ability to execute new sale contracts of hydrocarbons in the current energy market environment. Finally, the Mereenie Bonus was not recorded in the Company’s condensed consolidated financial statements.” (Original Source)
Shares of Magellan Petroleum are up nearly 4% to $1.37 in pre-market trading. MPET has a 1-year high of $3.84 and a 1-year low of $0.20. The stock’s 50-day moving average is $0.99 and its 200-day moving average is $0.80.
Magellan Petroleum Corp. is an independent oil and gas exploration and production company focused on the development of CO2-enhanced oil recovery projects in the Rocky Mountain region. The company conducts its operations through wholly owned subsidiaries: Nautilus Poplar LLC, Magellan Petroleum Australia Pty Ltd. and Magellan Petroleum (UK) Ltd. Magellan Petroleum was founded in 1957 and is headquartered in Denver, CO.