Through the deal Roc Oil has managed to increase its share in the Cliff Head Oil Field to 37.5% after acquiring Arc Energy's 7.5% interest in WA-286-P.
However, Streitberg was coy when asked about the return on Arc's investment, saying only that the proceeds received "were several multiples of what the company had originally invested."
Arc's original farmin to the block saw them paying 20% for a 15% stake. In 2001 a farmout agreement saw Wandoo Oil (a subsidiary of Mitsui) acquire 7.5% from ARC by paying 15% of the anticipated drilling costs. The farmout therefore represented a reduction in cost exposure from 20% of the well costs to 5%, to achieve a 7.5% interest.
The new agreement with Roc represents a consolidation of assets for both companies, which allows Arc to focus on its primary activities at Hovea and Eremia while using the Cliff Head proceeds to eliminate its net debt.
Streitberg said the company will begin putting new oil and gas discoveries into production as quickly as possible and to drill as many exploration prospects as possible to replace and increase reserves.
The terms of the deal include an initial payment of $9 million cash and additional payments up to a maximum of $3.75 million, subject to certain reserve levels being achieved.