AWE withdrawing from US shale

AWE Limited will sell off its US shale projects, the Australian energy company announced today.

In an agreement reached with US independent Carrier Energy Partners, the company will let go of its minority 10% working interest in the Sugarloaf Area of Mutual Interest venture on the Eagle Ford Shale formation in Texas. The transaction is for USD 190 million before tax and an additional USD 9 million for past drilling costs.

The proceeds will be used to repay debts and leave the company with net cash of USD 60 million at the projected closing date in March.

“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,” CEO of AWE Bruce Clement said.

The Waitsia gasfield sits around 367 km north of Perth, Australia. It contains an estimated 5.04 bcm (178 bcf) of reserves and 8.67 bcm (306 bcf) of gross resources. When fully developed it could meet 10% of Western Australia’s gas demand.

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