Newfield Exploration sells its Malaysian offshore interests for $898 million to Sapurakencana Petroleum Berhad

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London-based energy boutique specialist LXL LLP and US firm Morgan Lewis have advised on the US$898m sale of Newfield Exploration’s Malaysian offshore oil and gas interests.  Newfield Exploration has announced the signing of a share purchase agreement to sell all of its equity interests in Newfield Malaysia Holdings Inc. to SapuraKencana Petroleum Berhad for a total cash consideration of US$898 million.  The agreement is subject to the approval of Petroliam Nasional Berhad (PETRONAS) under the applicable Production Sharing Contracts, the purchaser's shareholder approval and customary closing conditions.  Newfield intends to offer preferential rights to its partners under the Joint Operating Agreements.   The agreement was executed after the Company undertook a thorough and rigorous bidding exercise involving over 40 companies.
 
"We have enjoyed significant success in Malaysia and had a great business partnership with PETRONAS in the region.  In early 2013, however, we announced our intent to exit our international businesses and focus our investments on domestic resource plays," said Lee K. Boothby, Newfield Chairman, President and CEO.  "Our year-to-date results build positive momentum and confidence in our ability to deliver on our three-year plan."
 
LXL LLP, a boutique energy-specialist law firm run by former Clifford Chance energy head Alan Jones, advised buyer SapuraKencana Petroleum on the deal after pitching for the work.  The oil and gas group is understood to have beaten 40 other global businesses to win the bid.  Mr. Jones and fellow LXL partners Giulia Carloni and Ayad Ridha were the legal advisers to the buyer, facing Newfield’s adviser Morgan Lewis.  The US firm fielded a team led by Houston-based energy partner David Asmus and including London-based energy partner Matthew Kidwell.
 
LXL LLP partner Giulia Carloni told us: "We have been involved in undertaking the legal due diligence on all the nine oil and gas blocks, drafting and negotiating the Share Purchase Agreement, as well as considering transitional services arrangements and preferential rights issues.  The nature of the deal was highly complex in light of the international cross-border issues and the fact that although this was a share acquisition, we had to translate the concepts and mechanics of a share deal structure into an asset deal".
 
Newfield plans to use the proceeds from the sale of its Malaysian assets to pay down existing debt and general corporate purposes.  Goldman, Sachs & Co. is acting as financial advisor on the sale of Newfield's international businesses.
 
The Texas-based group is understood to have sold its Malaysian businesses as part of a wider strategy to focus on the US.  The deal was signed on 22 October 2013.