The corporate move comes three months after CNGL said Oil Search would take over a number of its PNG permits. ExxonMobil pick up the remaining interests.
The price for the move has now been nailed down to $US96.6 million with Oil Search purchasing all ordinary shares of CNGL, net debt, associated equity instruments and working capital, based on an effective date of 30 April 2003.
Oil Search said it will fund this purchase from existing cash reserves and new debt, presently being negotiated as part of its refinancing program.
CNGL owns interests in four major PNG crude oil developments currently in production (Kutubu, Moran, SE Gobe and Gobe Main), as well as interests in three discoveries at SE Mananda, Saunders and Paua.
In addition, CNGL owns interests in the exploration licence PPL219 and two Petroleum Retention Licenses covering the Juha and P'nyang gas fields (recently included in the Highlands Gas Project) along with two pipeline licenses used for the export of crude oil.
Oil Search presently has existing interests in all these assets with the acquisition of the CNGL equity increasing those interests by between 8% and 25% in each project.
An independent reserve audit undertaken earlier this year showed the total Proved and Probable (2P) developed or near developed oil reserves held by CNGL to be 18.45 million barrels, as at 31 December 2002.
Oil Search managing director Peter Botten said the key driver for this acquisition was value and the immediate positive impact on the company's earnings fundamentals.
"Based on all metrics, this transaction represents excellent value and provides superior return on funds employed, being strongly earnings and cash flow per share accretive in 2004 and 2005."
The acquisition will also increase the company's oil production by around 20% per annum in the short to medium term.
"This transaction is an excellent result for Oil Search. The acquisition will immediately deliver material positive results to the company adding reserves and production at a very competitive price.
"Further, as Oil Search is transitioning to operatorship, the company is now in control of the value levers that will allow us to rapidly add value to these assets with the view to perhaps on-selling them at some point in the future," said Botten.
