The deal includes 43.13% interest in PRL 4, which contains the Stanley gas and condensate discovery, and 28.576% of PRL 5, which contains the Elevala and Ketu gas and condensate discoveries.
InterOil President Bill Jasper said under the terms of the agreement InterOil will retain a right of first refusal to purchase hydrocarbon condensates produced from these licences.
"Any condensates would, of course, be used as feed stock for our Port Moresby refinery," he said.
The PRL 4 transaction will need PNG Government approval while Santos holds pre-emptive rights to InterOil's stake in PRL 5.
Horizon said it had been steadily increasing its interests in the two licences over the past few years with the objective of having a substantial interest in a large discovered resource.
The company had purchased stakes in the two PRLs from Austral Pacific Energy in March.
The new deal will give Horizon 100% ownership of PRL 4 and push its holding of PRL 5 up to 49.647%.
Horizon said it sees commercialisation opportunities for Stanley in PRL 4 from as early as next year.
Horizon executive director Paul Nimmo told PetroleumNews.net's sister publication PNGIndustryNews.net the company was planning a production test of the Stanley well in the near future.
Meanwhile, Jasper said the gas flow rate from Elk-4 in Gulf Province is more than 14 million cubic feet of gas per day.
"The figure is indicative of a major gas reservoir, although further testing must be carried out at the site."
Jasper said the latest testing could put the subterranean reservoir at about 13km long by 5km wide and 0.5km high.
"If confirmed by further evaluation, this will be one of the most significant gas finds made in Papua New Guinea to date," he said.
Jasper said the sale of its licences to Horizon will allow more focus on Elk and Antelope exploration with further appraisal drilling planned at Antelope-1.
The gas from the Elk-Antelope structure will be used to fuel a two-train liquefied natural gas plant near Port Moresby capable of producing up to 9 million tonnes of LNG per annum from 2012 in the Liquid Niugini Gas venture, one-third owned by InterOil, Merrill Lynch and Clarion Finanz AG.
