Energy explorer Oil Search is buying into oil blocks in Alaska for $US400 million ($A522 million) in its first significant expansion beyond Papua New Guinea.
Oil Search has bought assets containing reserves of about 500 million barrels of oil in Alaska's Nanushuk and surrounding oil fields.
The assets are in the North Slope province, a prolific oil-producing region where Nanushuk, located adjacent to several giant producing oil fields, was discovered in 2013.
Oil Search has been looking to acquire oil interests for some time to complement its PNG gas assets and diversify its exposure beyond one single commodity and country, managing director Peter Botten said.
"The interests acquired provide a unique opportunity for Oil Search to participate in a world-class, high-returning, proven oil province that can add material value to the company," he said.
The assets also provide access to world-class oil assets immediately adjacent to existing infrastructure, he said.
The deal with private vendors Armstrong Energy LLC and GMT Exploration Company LLC will cover a 25.5 per cent interest in the Pikka unit and adjacent exploration acreage, a 37.5 per cent stake in the Horseshoe Block and 37.5 per cent in the Hue Shale.
Oil Search's major assets include a 29 per cent stake in the ExxonMobil-operated PNG LNG project and P'nyang field, and it also owns a 23 per cent stake in the Papua LNG project being developed by France's Total and the Elk-Antelope gas fields that will supply gas to it.
The company's only other overseas asset is a 34 per cent interest in an exploration licence in Yemen.
Oil Search also has an option, until June 2019, to purchase all of Armstrong and GMT's remaining interest in the Pikka Unit and the Horseshoe Block as well as additional interest in the adjacent exploration acreage and in the Hue Shale, for $US450 million.
Oil Search said the acquisition, together with exploration, appraisal and development costs, will be funded through its existing cash hoard of $US1.2 billion and undrawn financing facilities.
By 1110 AEDT, Oil Search shares were down 1.7 per cent to $7.25 in a strong Australian market.
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