TAG Oil Ltd (TSE:TAO ) (OTCMKTS:TAOIF) said its shareholders approved the sale of its Taranaki basin assets and operations in New Zealand to Malaysia-based Tamarind Resources Pte Ltd.
The Vancouver-based company said in a press release Thursday that under the deal, TAG will receive a cash payment of US$30-million at closing. In addition, TAG will draw a 2.5% gross overriding royalty on future production from wells and as much as US$5 million payable when various milestones are reached.
One well has triggered a payment of US$500,000 at closing, according to TAG Oil.
The transaction will be financed from Tamarind's available financial resources and is subject to regulatory approval. The deal is expected to close March 31.
TAG added that 97% of the shares voted were in favor of the deal.
Shares of TAG climbed C$0.02 to C$0.35 on Thursday.
In November, shares got a boost when TAG reported quarterly results including a net daily output increase of 14%.
Contact Dennis Fitzgerald at [email protected]