Australia's AWE Sells Stake in US Shale Gas Asset

Australia listed AWE Limited on Thursday announced it is has agreed to sell its stake in Texas shale gas asset.

The Australia firm has entered into an agreement to sell its 10 percent working interest in Marathon Oil operated Sugarloaf Area of Mutual Interest (AMI) to Carrier Energy Partners II, LLC (CEP II), for cash consideration of $190 million (A$271 million).

CEP II is a Houston, Texas USA, based private oil and gas company, focused on the acquisition and exploitation of upstream assets. AWE has received a deposit of $14 million (A$20 million) and the transaction is expected to be completed by the end of March 2016, the company said.

The sale proceeds will be used to repay debt drawn under the AWE’s debt facility and will substantially strengthen the company’s balance sheet, leaving AWE in a net cash position of approximately A$60 million at the anticipated closing date.

The sale is expected to generate a non-cash profit after tax of approximately A$16 million, subject to purchase price adjustments.

The Sugarloaf AMI is spread over approximately 24,000 acres in Eagle Ford play.