Perth, Feb 29, 2008 AEST (ABN Newswire) - Beach Petroleum (ASX:BPT) has sold a further 10 per cent equity share in the Basker-Manta-Gummy (BMG) joint venture in Bass Strait to Sojitz Energy Australia Pty Ltd, a wholly owned Australian incorporated company of Sojitz Corporation of Japan, for a total of $A123 million.
The sale is similar to an earlier deal, effective on June 1 last year, in which Beach sold a 10% interest in the BMG project. The agreement with Sojitz remains subject to the usual government approvals, the pre-emptive right of the other joint venture participants, and other conditions precedent typical in this type of transaction.
Beach Petroleum will retain a 30 per cent equity share in the BMG project.
The effective date of the transaction is 31 December 2007 and is expected to have a material positive impact on Beach's profit result for the six months ended December 31, 2007.
Beach Petroleum managing director, Reg Nelson said, "We are delighted to welcome Sojitz as a participant in the project. We believe that Sojitz will add significant technical and financial strength to the joint venture."
The BMG project was developed to initially produce oil from the Basker and Manta fields, based on initial proved and probable (2P) reserves estimates of about 23 million barrels (MMbbl). But new wells drilled in 2006 expanded the reserves base with 2P oil reserves standing at nearly 40MMbbl (as at 30 June 2007), while an associated increase in the natural gas resource has nearly quadrupled estimates of the gas/condensate resource.
Up to six new wells are scheduled to be drilled in the fields, commencing with Basker-6 in March 2008.
On completion, the participants in the Basker Manta Gummy Joint Venture will be:
- Anzon Australia Ltd 40% (Operator)
- Beach Petroleum Ltd 30%
- Itochu Corporation [CIECO Exploration and
Production (Australia) Pty Ltd] 20%
- Sojitz Corporation [Sojitz Energy Australia Pty Ltd] 10%
BEACH PETROLEUM BACKGROUND
Beach Petroleum was established in the early 1960's by the late Australian geologist, explorer and conservationist, Dr Reg Sprigg. The company pioneered exploration in the south-east Australian Otway basin and made significant gas discoveries around Port Campbell in 1979.
The company now has oil and gas producing assets in south-western Queensland and owns an average of 20 per cent in permits associated with the Cooper Basin production area in South Australia through the 2006 acquisition of Delhi Petroleum for a total of $590 million. As at 30 June 2007, Beach Petroleum held proven and probable reserves of approximately 90 million barrels of oil equivalent. Prior to this transaction taking place, oil and gas production for the 2007/08 financial year was expected to be approximately 10Mmboe.
Beach holds 30 per cent of the BMG project in Bass Strait in Victoria and has an active exploration program both onshore and offshore around Australia, and international locations such as New Zealand, Spain and Albania. The company is expanding its coal seam gas production at its Tipton West project in Queensland and is continuing to invest in the geothermal energy industry through a joint venture in the Paralana hot rock energy project in South Australia.
SOJITZ CORPORATION BACKGROUND
Sojitz Corporation was formed through the merger of two major Japanese trading companies, Nichimen Corporation and Nissho Iwai Corporation in 2002. This was followed by the creation of a new single entity, Sojitz Corporation on April 1, 2003.
Nichimen Corp began operations over a century ago as a cotton trading group and, like Nissho Iwai, expanded into trading operations covering a wide range of commodities. Now under the name Sojitz Corporation, a sogo shosha, the group operates a global investment and trading business.
Sogo shosha are general trading companies (GTC's) dealing with a wide range of products and materials. The seven largest are Mitsubishi Corporation, Mitsui & Co., ITOCHU, Sumitomo Corporation, Marubeni, Toyota Tsusho and Sojitz. Sogo shosha supply and distribute goods and raw materials from large manufacturers to smaller distributors and to numerous retailers. They are Japanese traders, existing at the center of Japan's global economic effort and serving as intermediaries for half of Japan's exports and two-thirds of its imports.
Contact
Reg Nelson
Managing Director
TEL: +61-8-8338-2833
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