PetroChina Gets Nod for Stake in South Canning Project
New Standard Energy Ltd announced that China’s largest energy company, PetroChina Company Limited (PetroChina), has received Chinese and Australian federal government approval to proceed with acquiring a 29 percent interest from ConocoPhillips in New Standard’s joint venture in the Southern Canning Basin in Western Australia. The deal between PetroChina and ConocoPhillips has been closed by a cash payment, and PetroChina’s full participation only awaits approval and registration by Western Australia’s Department of Mines and Petroleum.
The value of the cash transaction implies a current value in excess of $102 million (AUD 110 million) for the Canning Basin assets, valuing New Standard’s retained 25 percent interest at approximately $26 million (AUD 28 million) or $0.08 (AUD 0.09) per share. The conclusion of this cash transaction complements New Standard’s current cash balance of approximately $38 million (AUD 41 million) or $0.12 (AUD 0.13) per share.
New Standard Managing Director Phil Thick said the receipt of national government approvals and settlement of the cash payment to join the Joint Venture paved the way for PetroChina to meet its desire to partner ConocoPhillips and New Standard in the Canning Basin.
“New Standard now has two truly world class partners in the Southern Canning Basin,” Thick said.
“The addition of PetroChina provides further international validation of the Southern Canning Basin’s potential. The combined partnership gives New Standard access to funding, technical expertise, development experience and potential offtake capacity and creates a formidable global partnership to help progress the Joint Venture.”
PetroChina’s interest in the Joint Venture follows its recent investments in other Australian LNG projects and its participation highlights the continued reshaping of global gas markets by strong demand from Asia, particularly China.
The resultant equity percentages in the Southern Canning Project are ConocoPhillips 46 percent, PetroChina 29 percent and New Standard 25 percent. New Standard’s equity position has not changed and it will remain as operator of the joint venture. Apart from the revised equity percentages, the existing farm-in agreement remains unchanged.
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