Beach Will Farm Out Cooper Basin Acreage To Chevron

Beach Energy Ltd. and Beach group subsidiaries have signed documents with Chevron Australia Exploration 1 Pty. Ltd. and Chevron Australia Holdings Pty. Ltd. to farm out a portion of their interests in the PEL 218 (South Australia) and ATP 855 (Queensland) joint ventures (JVs) in the Cooper basin’s Nappamerri Trough onshore Australia, the company said in a press release.

Completion of the transaction is conditional upon: all relevant government approvals; approval and registration of the farm-in agreement in relation to PEL 218 by government authorities in South Australia; indicative approval of the transfers of interests in ATP 855 to Chevron by government authorities in Queensland; and approval and registration of the transfers of the interests by relevant authorities for each stage.

Icon Energy Ltd., Beach’s JV partner in ATP 855, has consented to and waived its preemptive rights in relation to each stage of the transaction, according to the press release. Subject to JV approvals, the key work program elements envisaged across the two permits involve an initial exploration program to be followed by pilot production programs.

If, after Stage 1, Chevron elects not to proceed to acquire Stage 2, the interest held by Chevron will be reassigned to Beach for no consideration, the company said. If, after Stage 2, Chevron elects not to proceed, Beach may elect to receive a reassignment of the interests held by Chevron.

As a result of this farm-out to Chevron, Beach is positioned for long-term appraisal and development of the Nappamerri Trough gas resources. Post Stage 2, Beach will support Chevron should it nominate for operatorship, the company said.

A put option has been granted by Beach to Icon, exercisable by Icon up to June 30, 2013, for Beach to acquire 4.9% of ATP 855 from Icon on payment by Beach of US $18 million, the company said.