Galilee Energy Limited (ASX: GLL), an Australian energy company focused on developing oil and gas projects, has announced a binding agreement for the sale of its wholly-owned subsidiary, Galilee Resources Pty Ltd, to Novus Energy Production Company Pty Ltd. This subsidiary holds the Glenaras Gas Project in Queensland’s Galilee Basin. The divestment marks a strategic move by Galilee to concentrate resources on building a scalable US Gulf Coast oil and gas business, beginning with the Zydeco Gas Project in Louisiana, USA.
Under the Share Sale Agreement, Novus will acquire Galilee Resources Pty Ltd, including ATP 2019 and its associated environmental authority. Galilee will be reimbursed approximately A$1.34 million in cash-backed security deposits for environmental assurance. A further A$500,000 in deferred cash consideration may be received upon an agreed project financing milestone. Importantly, Galilee retains a 2% net overriding royalty over future Glenaras production, ensuring continued exposure to the asset’s potential.
This sale is designed to remove ongoing capital demands associated with Glenaras and transfer its future funding requirements, rehabilitation obligations, and associated liabilities to the purchaser. Galilee’s Managing Director, Joseph Graham, stated that Glenaras’s development pathway requires dedicated focus no longer aligned with Galilee’s strategic direction. The company is now prioritising lower-cost, near-term production and cash flow opportunities in the United States, aiming for a more focused corporate structure.
Completion of the transaction remains subject to customary conditions, including regulatory approvals and third-party consents, expected to be satisfied or waived within one month. This divestment aims to position Glenaras within a dedicated ownership structure better able to pursue project-specific funding and development, while allowing Galilee to sharpen its strategic focus on expanding its US Gulf Coast oil and gas portfolio.
