Horizon Oil to Buy Stake in Beibu Gulf Block

6 June 2011 (Last Updated June 6th, 2011 18:30)

Australia's Horizon Oil has signed an agreement with Petsec Energy to acquire a 25% interest in block 22 / 12 in the Beibu Gulf, offshore China. The company will pay A$38m ($41m) in cash and issue 15 million options in consideration for the acquired block. Acquisition of bloc

Australia’s Horizon Oil has signed an agreement with Petsec Energy to acquire a 25% interest in block 22 / 12 in the Beibu Gulf, offshore China.

The company will pay A$38m ($41m) in cash and issue 15 million options in consideration for the acquired block.

Acquisition of block 22 / 12 will increase Horizon’s stake in the development project to 26.95% from its current 14.7%.

Horizon plans to fund the development costs of the block by launching a $75m-$80m convertible bond in the Hong Kong and European bond market, reports The Australian.

Pestec will use the proceeds from the sale to develop its shale oil exploration as well as traditional drilling in the US Gulf of Mexico, offshore Louisiana and Texas.