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PXP unit takes new partner for project

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A PERUVIAN UNIT of a company controlled by PXP Energy Corp. has taken on a new partner in an offshore exploration project in Peru, the Philippine-listed company told the stock exchange on Wednesday.

PXP Energy cited a disclosure by  Karoon Gas Australia Ltd., which announced the farm out of a 35% interest in offshore exploration Bock Z-38, Tumbes Basin Peru to Tullow Peru Ltd., a wholly owned subsidiary of Tullow Oil plc. 

Pitkin Petroleum Peru Z-38 SRL, a wholly owned subsidiary of Pitkin Petroleum Ltd. (PPL), holds a 25% participating interest in Peru Block Z-38. PXP Energy holds a 53.43% interest in PPL. 

KEI (Peru Z38) Pty Ltd., Sucursal del Peru holds a 40% interest in the offshore exploration joint venture.

“Karoon is excited to welcome a partner with such a long and successful exploration track record into Peru. Tullow is a company, like Karoon, that recognizes the importance of high-impact offshore exploration as a core driver of a company’s future value,” said Robert Hosking, managing director of Karoon, in a disclosure to the Australian Securities Exchange. 

Under the farm-out agreement, Tullow will acquire a 35% interest in the block by funding 43.75% of the cost of the first exploration well, capped at $27.5 million at 100%, beyond which Tullow will pay its 35% share.

Tullow is also to pay $2 million upon completion with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro.

The agreement remains subject to the satisfaction of certain licensing conditions and regulatory approvals, the Karoon announcement said. 

“Following completion of the farm-out well, Tullow will have an option to assume operatorship of the block,” it said.

Block Z-38 is located in the Tumbes Basin, next to the oil producing Talara Basin.

“Historically offshore Peru has experienced only limited exploration activity, however 2017 has seen a resurgence of interest and inflow of industry capital looking to test Peru’s exciting offshore potential,” Karoon added.

On Wednesday, shares in PXP Energy slipped 0.76% to P7.84 each. — Victor V. Saulon