Oil Search to Raise A$820m and Scrap LNG Stake Sale

18 October 2009 (Last Updated October 18th, 2009 18:30)

Australian oil and gas producer Oil Search is raising up to A$895m (US$820m) after ending talks to sell a minority stake in a Papua New Guinea liquefied natural gas (LNG) project. Oil Search also said that project leader ExxonMobil had raised its forecast of the cost of the project by a

Australian oil and gas producer Oil Search is raising up to A$895m (US$820m) after ending talks to sell a minority stake in a Papua New Guinea liquefied natural gas (LNG) project.

Oil Search also said that project leader ExxonMobil had raised its forecast of the cost of the project by about 15% to $15bn, to reflect a bigger scope for the project and additional contingency measures, reports Reuters.

Oil Search had been in talks to sell a 3.5% stake out of its total 34% holding to Abu Dhabi's Government-owned International Petroleum Investment Co. (IPIC).

But the two agreed to end the deal as regulatory delays would have prevented Oil Search from finalising financing arrangements ahead of the 8 December final investment decision target date set by Exxon, Oil Search said in a statement.

Oil Search will sell new shares at A$5.90 each, a 12.6% discount to its last traded price. Macquarie Bank and Morgan Stanley are the lead managers to the offer.