Mitsui Exercises Option to Buy Stake in WestSide’s Bowen Basin CSG Permits (Australia)

WestSide Corporation Limited has received a notice of intention from Mitsui E&P Australia Pty Ltd (Mitsui) to exercise its options to acquire 49 per cent of the Company’s 50 per cent interests in Bowen Basin tenements ATP 688P and ATP 769P.

Under the terms of the farm-in option Mitsui will pay WestSide approximately $11.5 million – a sum equivalent to 49 per cent of WestSide’s exploration costs within the tenements to date.

Mitsui would then have a 24.5 per cent interest in those tenements while WestSide’s interest in each tenement would reduce from 50 per cent to 25.5 per cent, subject to receipt of a waiver of pre-emptive rights from QGC – WestSide’s existing joint venture partner in those areas.

WestSide’s Chief Executive Officer Dr Julie Beeby welcomed Mitsui’s decision to expand the existing alliance to include the Company’s other prospective Bowen Basin tenement interests via a three-way exploration joint venture with Liquefied Natural Gas (LNG) project developer, QGC.

“Subject to receipt of QGC’s waiver, these farm-ins will significantly strengthen WestSide’s joint venture relationship with Mitsui and credentials as an effective, low-cost operator, and validate the Meridian SeamGas joint venture’s LNG strategy,” Dr Beeby said.

“Significantly, ATP 769P is contiguous with the Meridian SeamGas gasfields and contains the Paranui gasfield where WestSide is currently operating an expanded production pilot project.”

In addition to receipt of QGC’s waiver, the farm-ins also remain subject to receipt of all relevant regulatory approvals, the execution of documentation joining Mitsui to the existing Joint Operating Agreements and receipt of payment.

Dr Beeby noted that WestSide had $36.3 million in cash at 31 December 2010 and remained well funded to undertake planned work programs within its tenements into calendar 2012.

“The additional funds from the farm-ins will provide WestSide with greater financial flexibility to accelerate reserves expansion exploration and production programs at Meridian SeamGas,” Dr Beeby said.

In March 2010 WestSide and Mitsui announced they would jointly acquire the since renamed Meridian SeamGas CSG fields and that Mitsui would have an option to acquire 49 per cent of WestSide’s existing interests in the neighbouring Paranui prospect (ATP 769P) and its new Galilee Basin tenements (ATP 974P and ATP 978P).

The alliance was subsequently extended in June 2010 to potentially include WestSide’s CSG interests in ATP 688P. The exercise deadline was later extended until 31 March 2011 and then subsequently to 6 April 2011 to enable the parties to finalise terms.

Discussions with QGC regarding a waiver of its pre-emptive rights are continuing.

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Source: WestSide Corporation, April 7, 2011;