Senex Energy Ltd. has agreed a Surat Basin gas asset swap in Queensland, Australia, with the PL 171 and ATP 574P joint venture partners (QGC JV).
Under the terms of the tenement transfer agreement, Senex will transfer its minority interest in eastern Surat Basin permits PL 171 and ATP 574P (Senex permits) to the QGC JV, and the QGC JV will transfer its 100% interest in, and operatorship of, western Surat Basin permits ATP 795, ATP 767 and ATP 8892 (QGC JV permits) to Senex. No cash consideration is payable by any party in respect of the tenement transfers.
The QGC JV permits are adjacent to Senex’s existing western Surat Basin assets ATP 771P and ATP 593P and form the basis of the Western Surat Gas Project. On completion of the transaction, Senex will hold net 2P gas reserves of 488 petajoules (PJ).
Commenting on the transaction, Senex Managing Director Ian Davies said the asset swap was mutually beneficial and positioned Senex as part of the solution to the looming gas shortage in domestic and export markets.
“This is a win-win transaction,” Davies said. “Combining the QGC JV’s western Surat Basin assets with our own western Surat Basin acreage gives Senex the scale required to build a material Surat Basin gas business on our own terms. The arrangement also enables QGC and its partners to focus on the eastern Surat assets to the benefit of the greater QCLNG project.”
He added that Senex will invest up to $37 million (AUD 40 million) from existing financial resources in the Western Surat Gas Project over the next three years, targeting commencement of pilot testing in 2015/16 and moving to an investment decision on commercial production as soon as appraisal results support it.
Completion of the transaction is expected by Dec. 14 and is conditional on Foreign Investment Review Board, Queensland government, and other regulatory approvals.