Vermilion said in a statement to the Toronto Stock Exchange that it would pay $US125.4 million ($A151.6 million) for the 40% stake held by Wandoo, an affiliate of Japan’s Mitsui and Inpex.
The purchase will take Vermilion’s interest in the field to 100%.
Arc Energy, which was this morning in a trading halt, agreed late last month to acquire Wandoo’s portfolio of assets in Australia for $US315 million ($A380 million), including the stake in the Wandoo field in the Carnarvon Basin.
At the time, Arc managing director Eric Streitberg said his company would be “very disappointed” if Vermilion exercised its right to purchase the remaining stake.
“If they exercise the right and purchase the asset, it will take about a third of the deal out,” he said.
The Wandoo field is a well-understood, long-life oil field that Arc said generated considerable cash flow with good exploration potential in the surrounding area.
But Vermilion’s decision will not affect the sale to Arc of Wandoo Petroleum’s two other assets - a 24% stake in the Cliff Head oil field and 12.5% of the BassGas project. Neither of these assets had pre-emptive rights associated with them.
This morning, Arc went into a trading halt while the company completed a share placement to fund the acquisition of the remaining assets.
The company then extended the halt this afternoon.
Vermilion bought its original 60% interest in the Wandoo field in 2005 from ExxonMobil.
Based on current production from Wandoo, the acquisition will increase Vermilion’s production by about 3000 barrels of oil equivalent a day, the company said. The field had proven and probable reserves of 10.1 million barrels of oil.
