US major Chevron has finalized a deal to farm into shale gas acreage incentral Australia's Cooper Basin owned by local upstream player Beach Energy.
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Chevron has paid Beach $36 million for a 30% stake in the PEL 218 permitin South Australia and $59 million for 18% of ATP 855 in Queensland, theAustralian company said Monday. The permits are known as the NappamerriTrough gas ventures.
The asset transfers have occurred, although they remain subject toformal approvals by the South Australian and Queensland state governments,Beach said. Indicative approval has been granted in Queensland, and theagreement has been approved and registered in South Australia to date, thecompany added.
The acreage "has the potential to be a material source of gas for boththe eastern Australian domestic and international markets in the comingyears," Beach Managing Director Reg Nelson said in a statement.
Chevron's first-stage spending under the farm-in includes a commitmentto invest $95 million in exploration in the PEL 218 permit. In the secondstage, Chevron could pay up to $123 million for another 30% of PEL 218 and$36 million for an additional 18% of ATP 855.
When the farm-in was announced in February, Chevron Australia ManagingDirector Roy Krzywosinski said the company has an "industry-leading queue" ofLNG projects under development in Australia. Chevron is currently developingthe A$52 billion ($52.1 billion) Gorgon and A$29 billion Wheatstone LNGprojects in Western Australia.
"This agreement provides an opportunity to explore a new, prospectivebasin and potentially add to our natural gas portfolio," Krzywosinski said atthe time. "The Cooper Basin is an established petroleum producing basin andprovides the opportunity to leverage our expertise in tight gas."
Beach has been among the first-movers exploring for shale and tight gasin the Cooper Basin, Australia's largest onshore conventional oil and gasproduction province.
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