Oil Search announced this on Wednesday, saying that the projects included a 25.5% interest in the Pikka Unit and adjacent exploration acreage and a 37.5% interest in the Horseshoe Block for $400 million.
"These leases contain about 500 million barrels (gross) in the Nanushuk and satellite oil fields, with Nanushuk being one of the largest conventional oil fields discovered in the US in more than 30 years," Oil Search said, adding that the acquisition would provide it with world-class oil assets immediately adjacent to existing infrastructure.
"The Alaska North Slope is an established, prolific oil producing province, in the world's largest developed economy, with an attractive fiscal regime. The assets complement the company's existing top-quartile, high-returning PNG gas portfolio and, with significant growth opportunities, have the potential to become, over time, a material business for Oil Search, of a scale equivalent to its PNG assets," Oil Search said.
The agreement also includes an option, exercisable at Oil Search's discretion until June 30, 2019, to buy the remaining interest in the Pikka Unit and the Horseshoe Block (25.5 % and 37.5% interest respectively) as well as an additional 25.5% interest in the adjacent exploration acreage and 37.5% in the Hue Shale, for $450 million.
Oil Search will become the operator on June 1 next year.
Managing director Peter Botten said that for some time, Oil Search been seeking to acquire oil interests to complement its PNG gas assets, to create a more balanced portfolio that was less exposed to one single commodity and one country.
"The key challenge has been to achieve this without diluting the company's world-class, high returning PNG assets. Using our existing relationships, this Alaska North Slope opportunity has been proactively pursued and an agreement structured to the benefit of all parties," Botten said.