Proceeds will be used for further development of the Permian Project in Reagan and Irion Counties that has proved and probable reserves of 5 million barrels of oil equivalent.
The sale price of the project, which targets the Eagle Ford Shale, represents about the capital spent to date on the drilling and partial completion of the two wells and infrastructure.
Golden Gate noted that while Cutlass had been a good opportunity to participate in an unconventional development program, it remains untested from a technical standpoint as neither of its two wells have been fracture stimulated or put on production.
The commercial aspects of the project have also been impacted by the higher relative financial performance that it believes can be achieved from the Permian Project.
All other partners have been provided written notices of the sale terms and have until later this
month to respond with their election to take up their proportionate share of the working interest that is under an agreement for sale.
Golden Gate Petroleum had A$1 million in cash as of 31 December 2012 and has since then completed a $3.2 million Entitlement Issue and secured a $7.5 million funding facility from The Lind Partners.
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