AWE Exits the Eagle Ford and Carrier Moves In

$190 Million Deal for Karnes County Assets

February 8, 2016

By Elizabeth Alford –

Carrier Energy Partners II moves into the Eagle Ford by purchasing holdings from Australia-based AWE.

In 2010, AWE acquired a 10 percent stake in Sugarloaf Area of Mutual Interest in Karnes County, Texas. The company has worked with Marathon Oil to develop their stake that comprises 24,000 acres in the Eagle Ford shale with proved plus probable reserves of 47.8 million barrels of oil equivalent.

The deal announced last week will cost Carrier Energy Partners II $190 million in cash and is expected to be complete by the end of March 2016.

“AWE has worked with the operator, Marathon Oil, over the past few years to optimally develop the asset and realise its potential. With Sugarloaf now entering a more mature phase of production and development, the time is right to divest this asset and focus on the next major project for AWE – the Waitsia gas project in Western Australia,” Clement said.

The transaction is expected to be completed by the end of March 2016. Highlights include:

      • •  AWE agrees to sell its 10% working interest in the Sugarloaf project to US-based Carrier Energy Partners II, LLC
      •     for USD 190 million (AUD 271 million) before tax

      • •  Additional USD 9 million (AUD 13 million) payment to AWE for past drilling costs

      • •  Sale proceeds will be used to repay all debt, resulting in an estimated net cash position of AUD 60 million at closing
      •     (March 2016)

      • •  Tax on the transaction is estimated at USD 35 million (AUD 50 million), payable in the June quarter

      • •  The current mark to market value of AWE’s unutilised oil price hedges relating to the Sugarloaf asset is USD 5.2 million
      •     (AUD 7.5 million)