Exoma Energy Limited has executed a Farmin Agreement, in Beijing, with one of China’s leading integrated energy companies, China National Offshore Oil Corporation, through one of its subsidiaries in Australia (CNOOC).
Under the terms of the Farmin CNOOC will acquire a 50% participating interest in Exoma’s ATP 991, 996, 999, 1005 and 1008 located in the central Queensland Galilee Basin (Map 1) by contributing $50 million towards exploration and appraisal expenditure during the Farmin Period, expiring on 31 August 2013.
Exoma has also granted to CNOOC an option (the “Option”), expiring five days after the satisfaction of all conditions precedent, to acquire 86.6 million ordinary shares of the Company at 31.5 cents per share. Each share will be issued with one free attaching option to acquire a further ordinary share at an exercise price of 31.5 cents, expiring 31 December 2012.
The Farmin Agreement and the Option are conditional on the indicative approval of the Queensland Government to the assignment of the Participation interest in the ATP’s, approvals and consents from the Chinese Government Authorities and notice from the Treasurer pursuant to the Foreign Acquisitions and Takeovers Act 1975 that there is no objection to the transaction. In addition, the granting of the Option is also conditional on shareholder approval in accordance with the ASX Listing Rules.
CNOOC stated that “CNOOC has the desire to be acquiring an interest in such a significant gas exploration area in Queensland which we believe has the potential to support one of the largest coal seam gas and shale gas projects in Australia. CNOOC believes this investment will benefit both parties.”
Exoma’s Chairman Mr Brian Barker said “It is a very positive endorsement that CNOOC, a world leader in the petroleum industry, shares our technical and commercial assessment of the resource potential of Exoma’s Galilee Basin permits. With CNOOC’s involvement, Exoma will now accelerate its exploration program for its Galilee Basin permits which Exoma believes host very large CSG and SG resources, with additional potential for conventional petroleum resources. We are confident that these gas resources will underpin one or more large downstream gas development projects serving both export and domestic gas markets for many years.”