Primary Petroleum to sell stake in Western Montana oil assets

Primary Petroleum has signed sale and joint venture agreement with a US-based industry partner to sell its 32.5% interest in a 1,177km² area in Western Montana, US, for $48.5m.

The partner has paid $7.5m in cash and will pay $41m for the initial exploration programme, which will be completed by the end of 2012.

The initial exploration programme involves carrying out 3D seismic studies and drilling vertical and horizontal wells.

Primary Petroleum will retain operatorship during the 3D seismic and vertical drilling programme, and the partner will be the operator of the horizontal programme.

The partner will have an option to invest another $41m on a similar secondary exploration programme to acquire an additional 17.5% working interest.