PetroChina Receives Approval for Canning Basin Acquisition
New Standard Energy Ltd announced that China’s largest energy company, PetroChina Company Limited, has received Chinese and Australian federal government approval to proceed with acquiring a 29% interest from ConocoPhillips in New Standard’s joint venture in the Southern Canning Basin.
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 AUD$110m for the Canning Basin assets, valuing New Standard’s retained 25% interest at approximately AUD$28m (or 9 cents per share). The conclusion of this cash transaction complements New Standard’s current cash balance of approximately AUD$41m (or 13 cents 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,” Mr 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%, PetroChina 29% and New Standard 25%. 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.
New Standard has renamed the Goldwyer Project to the Southern Canning Project. This name change comes as a consequence of learning through consultation with Traditional Owners that certain cultural sensitivities existed around the previous name, and reflects the joint venture’s commitment to community and heritage and respect for the culture and history of the Traditional Owners on whose land it operates.
The change to the Southern Canning Project is a change to the project’s name alone. The target formations and drilling program are unaffected.
The way New Standard and its partners have been able to resolve this cultural issue is reflective of the open, honest and positive relationships we share with the Traditional Owners associated with the Southern Canning Project. The company looks forward to strengthening its relationships with these key stakeholders as our operations start to ramp back up.