Junior energy producer AWE Limited is selling its 10% interest in the Texas oil shale project Sugarloaf for $US190 million ($A271 million).
A short time ago, the company’s shares were at $0.47, up more than 30%.
The buyer is Carrier Energy Partners, a Houston-based private oil and gas company.
The cash will be used to repay debt, leaving AWE in a net cash position of about $A60 million.
CEO Bruce Clement says the sale of Sugarloaf is consistent with the company’s strategy of divesting assets in order to recycle capital into ground floor developments such as the Waitsia gas project in Western Australia.
“Sugarloaf has been a valuable growth project for AWE because it is located in the sweet spot for condensate production from the Eagle Ford Shale formation in Texas,” he says. “We acquired full control of the 10% Sugarloaf interest in 2010, having recognised the potential value of the acreage.”
AWE posted sales revenue of $284 million, down 14%, and an underlying net loss of $52 million for the year to June.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.