More info on Deep Well stake sale,
In March 2022, M&P finalised the sale of its 25% interest in the Sawn Lake project in Alberta to Andora Energy Corporation (“Andora”), which already owned 50% of the asset and is the operator. In consideration for a payment to Andora of $0.5 million, M&P has transferred all of its financial commitments pertaining to Sawn Lake, and particularly those related to site abandonment costs. M&P has also agreed to grant an exclusivity period to discuss the potential direct or indirect acquisition by Andora of M&P’s 19.57% stake in Deep Well oil & Gas, Inc., whose subsidiaries collectively hold a 25% participating interest in the Sawn Lake project.
Although the production pilot conducted between 2014 and 2016 provided encouraging technical results, development of the Sawn Lake project is not part of M&P’s strategy. Firstly, the economics of the project are adversely affected by local crude oil price dynamics, with substantial discounts relative to global crude benchmarks. Secondly, the project’s carbon intensity, particularly greenhouse gas emissions generated by the production of steam required for the oil recovery technique known as “SAGD” (steam-assisted gravity drainage), is incompatible with the Group’s investment criteria.
