25/02/2013 - 11:04

Chevron buys into Cooper Basin gas fields

25/02/2013 - 11:04

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Chevron buys into Cooper Basin gas fields

Chevron Australia has struck a deal with Beach Energy that will see the US energy giant spend at least million and potentially as much as million on two onshore gas exploration fields.

Under its agreement with Beach, Chevron will take an initial 30 per cent interest in PEL 218 in South Australia and an 18 per cent working interest in ATP 855 in Queensland.

The agreement allows Chevron to explore, evaluate and assess the potential for unconventional gas from shale and tight gas development.

"This opportunity, potentially, gives us additional high-quality resources with long-term growth potential which aligns with our business strategy," Chevron Asia Pacific Exploration and Production Company president Melody Meyer said in a statement.

Chevron said the Cooper Basin was an established petroleum producing basin from which the company could leverage its expertise in tight gas.

The agreement will see Chevron pay million in cash and fund million of exploration in stage one..

If Chevron chooses to proceed to stage 2, it will pay a further million in cash and fund an extra million of exploration.

The third stage of the agreement could see Chevron make a "commitment bonus payment" of million. 

Beach said the work programs involved an initial exploration program to be followed by pilot production programs.

"This transaction vindicates in many ways the vision that the company has in relation to the potential of unconventional gas in the Cooper Basin," Beach's managing director Reg Nelson said.

In a second agreement, Beach has granted a put option to its current joint venture partner Icon Energy, allowing Icon to sell to Beach 4.9 per cent of ATP 855 for million. 

At 1302 AEDT Beach Energy shares were 10.5 cents, or 8.1 per cent, higher at $1.40.

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