Novus sells SE Sumatra interest for $20 million

Novus sells SE Sumatra interest for $20 million

SYDNEY (Dow Jones): Novus Petroleum Ltd., an Australian oil and gas company, yesterday said it has sold its 3.72 percent interest in the South East Sumatra Production Sharing Contract in Indonesia to Pittencrieff Resources PLC of the UK for US$20 million.

The sale is subject to the approval of shareholders of Pittencrieff, which will be sought at a meeting in July. Subject to such approval, the sale is expected to be completed by the end of July.

Novus said the sale price was derived from the residual book value of the property as at June 30, of US$12.6 million, as well as the company's proven and probable reserves comprising 16.7 million barrels of oil and 24.8 billion cubic feet of gas.

"It is intended that the proceeds of the sale shall be used to retire some of the debt recently drawn to acquire the portfolio of properties in the Khalda area of Egypt," Novus said in a statement. Earlier this month, Novus bought five Egyptian oil and gas assets from South Korea's Samsung Corp.for US$40 million.

"The sale of the South East Sumatra stake isn't in response to any concern over the performance of the asset...(but) is driven by our desire to inject more growth assets, such as the newly acquired Egyptian properties, into the Novus portfolio," said Bob Williams, Novus' managing director.

"Likewise, the sale doesn't reflect concern about our assets in Indonesia. We are committed to our Indonesian business and are confident that opportunities exist in the country to add further value, especially as its economy recovers," Williams added. "Our intention is to position the company with an adjusted portfolio more suited to the next five years than the one assembled in 1994 to launch the company."