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- The QLD Government appoints State Gas (GAS) and Santos (STO) as preferred tenderers of two new gas exploration areas in Central Queensland
- The blocks sit adjacent or near to State Gas’ Reid’s Dome and Rolleston-West projects and will increase its position by 60 per cent to 2630 square kilometres
- State Gas will own a 35 per cent stake, while Santos will own an operating 65 per cent interest and leverage its experience in producing gas in the region
- The JV partners will now focus on obtaining the relevant approvals before any work can commence
- GAS shares are trading 12 per cent higher at 28 cents and STO is up 1.79 per cent to trade at $8.24 at 12:53 pm AEST
The Queensland Government has appointed State Gas (GAS) and Santos (STO) as the preferred tenderers of two new gas exploration areas in Central Queensland.
PLR2021-1-2 and PLR2021-1-3 sit adjacent or near to State Gas’ existing Reid’s Dome and Rolleston-West projects (to the west and north), as well as Santos’ interests to the east.
The new blocks cover a combined 1035 square kilometres and will increase State Gas’ acreage position by around 60 per cent to 2630 square kilometres, with the potential to increase its resource position.
The energy stocks will own the exploration areas in a joint venture (JV) with State Gas to hold 35 per cent and Santos to hold the majority 65 per cent stake.
Santos will also be the operator which reportedly allows the JV to benefit from the ASX 200 company’s extensive experience in producing gas from Bandanna coals in the area.
Like State Gas’ existing acreage, neither block is subject to domestic gas reservation which means the gas produced from the areas can be sold into any market.
State Gas Executive Chairman Richard Cottee said the two new blocks are a “significant addition” to the company’s existing portfolio.
“They will provide increased synergies in operations, synchronistic development and gas marketing optionality,” Mr Cottee said.
“I have always been a firm believer in the value of optionality and I can confirm that, with this award, State Gas’ flexibility is increased.”
Mr Cottee also expressed his delight to establish a working relationship with Santos.
“Santos is a major player in the industry, with a long track record of safe and sustainable operations. Of particular relevance here is its extensive holding in the area, and its unrivalled experience with the Bandanna coals, the primary target of both of these new blocks and our existing Rolleston-West project.”
The JV partners will now focus on obtaining environmental and other approvals relevant to the areas to enable work to commence.
GAS shares were trading 12 per cent higher at 28 cents and STO was up a slight 1.79 per cent to trade at $8.24 at 12:53 pm AEST.
