WestSide has said that it will join with Mitsui E&P Australia (MEPAU) to acquire the Dawson Seamgas coal seam gas (CSG) assets in Queensland’s Bowen basin from existing owners Anglo American (Anglo) and Mitsui Moura Investment (MMI).
As per the new joint venture arrangement, WestSide will be the operator and own 51% of the Dawson Seamgas fields (Petroleum Lease 94 and Mining Lease gas rights).
The company said that the acquisition will transform it into a significant CSG producer and team it as operator in a joint venture with Mitsui, which is participating in nine LNG projects that deliver substantial volumes of LNG to the Asian market.
Angus Karoll, chairman and CEO of WestSide, said: “This joint venture opportunity opens the door for WestSide to become one of the most significant dedicated CSG producers in Australia while providing access to earnings, global LNG export markets and capital for future field development and associated infrastructure.”
Mr Karoll said that the company had agreed to pay $26.8m for Anglo’s interest in PL94 and the ML gas rights and had planned to raise capital via a combination of placements, entitlement offer and other facilities to finance the acquisition and fund development costs to increase production.
The Dawson Seamgas fields have certified proved (1P) gas reserves of 60 petajoules (PJ), 186PJ of proved and probable (2P) reserves and 334 PJ of proved, probable and possible (3P) reserves.
The Dawson Seamgas fields near Moura are currently producing approximately 12 Terajoules of gas per day (TJ/day) and comprise a range of CSG assets including a petroleum lease, gas rights in mining leases and gas compression and pipeline infrastructure connected to Queensland’s commercial gas network.
Mr Karoll added, “WestSide and MEPAU will be targeting work programs to increase the field production to 25TJ/day and further expansion thereafter, with an ultimate goal of exporting LNG and supplying new domestic contracts from 2015/2016 when the current supply contracts in place have finished.”
The new joint venture arrangement follows a decision by 49% partner MMI, in concert with MEPAU, to waive its pre-emptive rights to acquire Anglo’s stake in the producing CSG field and negotiate separate agreements with WestSide.