BPH Energy subsidiary Advent Energy inks deal with OMV for stake in NZ offshore petroleum permits

BPH Energy Advent Energy OMV New Zealand Offshore Taranaki Basin oil gas Aotearoa
BPH Energy also expects to seek shareholder approval for a proposed deal with a hydrogen technology company.

Diversified investment company BPH Energy (ASX: BPH) has revealed its 36% owned oil and gas subsidiary Advent Energy is gaining the right to acquire a 30% stake in three offshore New Zealand petroleum exploration permits from Austrian major OMV.

Advent’s subsidiary Aotearoa Offshore Ltd NZ (AOLNZ) signed the farm-out agreement with OMV’s New Zealand subsidiary for the stake in the permits, which cover 5,180 square kilometres in New Zealand’s Taranaki Basin.

Exploration drilling had been undertaken on the permits in 2019 and 2020, with the focus currently being the assessment of results from the Toutouwai-1 discovery made last year in PEP 60093.

According to BPH’s announcement, the discovery well showed positive indications of the presence of hydrocarbons within the Cretaceous and Palaeocene interval with potential also recognised in the shallower Miocene and early Pliocene interval.

Advent executive director David Breeze described the farm-out deal as an “extremely positive investment in a proven basin which provides the opportunity for near-term appraisal drilling, development and monetisation”.

He said the opportunity also represented a “diverse multi-play portfolio” across the entire acreage position and “reasonably limited cost exposure with significant further exploration potential”.

Farm-out terms

Under the farm-out deal, OMV NZ will remain the operator of the three permits with a 40% participating interest.

In addition to AOLNZ’s 30% stake, the remaining 30% interest will continue to be held by SapuraOMV Upstream (NZ) Sdn Bhd, which is a joint venture between Malaysia-based Sapura Energy Berhad and another OMV subsidiary.

The deal follows Advent’s bid submission in November 2021 and the signing of a farm-out agreement between the parties in late December.

BPH has provided loan funding to Advent of $3 million on commercial terms to make a cash payment to cover expenditure on the licences over 2022, including an $800,000 loan to cover agreed work program and budget expenditures for the year under the farm-out agreement.

This funding is unsecured, and Advent has agreed to repay it after generating funds from a planned capital raising, which could be in the form of a share placement, rights issue or possible future listing. BPH confirmed it does not intend to increase its relevant interest in Advent.

2022 work plan for the permits

The work plan and budget for 2022 across the three permits includes seismic reprocessing, post-drill benthic surveys relating to a well drilled in 2019 and other geological and geophysical studies.

There are also preliminary planning costs relating to the Toutouwai-2 well (currently being assessed) in advance of any future appraisal well decisions.

In keeping with licence commitments, there are currently no obligations to drill on two of the permits until April 2024, and April 2028 for the third.

Trade suspension extended as BPH proposes deal with hydrogen tech company

BPH initially requested a voluntary suspension of trade on the ASX pending its Advent farm-out announcement.

Late on Monday the company called for an extension to its suspension period to allow for the completion and release of a meeting to seek shareholder approval of a change in the nature and scale of the company’s activities.

This relates to BPH and Advent proposing to enter into a transaction with a company involved in hydrogen production technology.

The suspension is expected to last until next Monday or upon release of the notice, with the shareholder meeting slated to occur on or around 12 May.

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