AGL Energy declares the acquisition from AJ Lucas Group Limited (AJL) and Molopo Australia Limited of the companies which hold 100% of the interests in PEL 285 in the Gloucester Basin for $370m.

AGL anticipates completing the acquisition on or about 19 December 2008. PEL 285 has 175 PJ of 2P reserves certified by NSAI as at February 2008, representing approximately 26% of New South Wales certified reserves. Based on additional drilling data obtained by AJL (the operator of the Gloucester Basin joint venture) since February 2008 and applying assumptions consistent with the NSAI methodology, AGL expects that reserves will be upgraded to between 400-500 PJ (2P) and 700-800 PJ (3P). AGL anticipates formal certification of these updated reserves in the first half of calendar 2009.

AGL Managing Director Michael Fraser said, “This is a prudent allocation of capital that expands AGL’s equity gas footprint in our core New South Wales market. The timely development of the Gloucester and Hunter gas projects will provide AGL with a new source of long term wholesale gas supplies for the Sydney and Newcastle markets.”

AGL has been conducting a review of a range of opportunities in the upstream gas market, including due diligence on the options it holds to acquire 100% of the Lacerta and 15% of the Polaris gas fields in Queensland from BG Group plc. These options expire in April 2009.

Mr Fraser added, “We continue to assess opportunities in upstream gas markets against the backdrop of our stated intention to maintain the company’s BBB Credit Rating”.

AGL has significantly strengthened its Balance Sheet over the last 12 months with asset sales totalling $3.2 billion. AGL’s investment in the Gloucester Basin will be funded from existing internal cash reserves.

Tags: AGL Energy Limited