(Updates to add CEO’s comments in third paragraph.)
Oct. 4 (Bloomberg) -- Molopo Energy Ltd., an explorer focusing on oil projects in the U.S. and Canada, said it is “quite a long way down the process” of selling its coal-bed methane assets in Australia’s Queensland state.
“We’ve been pleased” with the level of interest in the Queensland natural gas project, Ian Gorman, chief executive officer of the Melbourne-based company, said in a telephone interview today. Molopo aims to make an announcement by the end of the year on its plans for the assets, he said.
The Molopo holdings are about 150 kilometers (93 miles) from Gladstone, where BG Group Plc, ConocoPhillips and Santos Ltd. are building plants to liquefy gas from coal deposits for export to Asia. They also are probably the largest gas reserves in Queensland that aren’t already under contract, Gorman said.
The Australian explorer earlier this year hired Lazard Ltd. to advise the company on a potential sale of the coal bed methane assets after announcing plans to concentrate on oil projects in North America. Molopo plans to spend about A$40 million through March 2012 on drilling at its Wolfcamp venture in Texas and its Bakken project in Canada, Gorman said.
“Oil is something that can be monetized much more quickly and becomes cash flow positive much more quickly,” he said. “So by building the company on the back of oil, we are then positioned to be able to tackle long-term gas projects.”
Bow, Eastern Star
Arrow Energy Ltd., owned by Royal Dutch Shell Plc and PetroChina Co., agreed last month to acquire Queensland explorer Bow Energy Ltd. for A$535 million ($509 million), gaining resources for a proposed liquefied natural gas venture. That followed a deal in July by Adelaide-based Santos to buy the shares in Eastern Star Gas Ltd. it didn’t already own for A$730 million.
“Following the recent moves on Eastern Star and Bow and the renewed push by Shell/PetroChina to progress their LNG project in Queensland, Molopo may succeed in achieving a sale price in excess of” A$62 million, Credit Suisse analysts, including Sandra McCullagh in Sydney, said in a Sept. 15 report.
Molopo climbed 1.5 percent to 68.5 cents at the 4:10 p.m. close of Sydney trading, compared with a 0.6 percent drop in the S&P/ASX 200 Index, after the company said it started drilling the first of three planned exploration wells at the Wolfcamp project in Texas. The shares have fallen 35 percent this year.
--Editors: Baldave Singh, Ryan Woo
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