High Peak Royalties acquires stake in Royalco Resources

THE ROADHOUSE BOWSER: High Peak Royalties (ASX: HPR) has acquired a strategic 19.99 per cent shareholding in ASX-listed royalty company Royalco Resources (ASX: RCO).

High Peak explained Royalco holds a collection of oil & gas royalty interests across Australia and overseas.

The company’s key royalty interest is a one per cent interest in the Weeks Petroleum Royalty (a 2.5 per cent overriding royalty covering all production from the Bass Strait fields in the Gippsland Basin jointly owned by ExxonMobil and BHP Billiton).

Royalco received $852,792 in royalty payments in calendar year 2014 from its one per cent interest in the Weeks Petroleum Royalty.

High Peak said the acquisition of the stake in Royalco is consistent with its own royalties’ strategy of gaining exposure to interests, adding the deal fits in well with its existing portfolio of oil and gas royalties covering 23 producing areas and high potential exploration areas in Australia, the United States and the Seychelles.

“High Peak Royalties’ shareholding in Royalco provides an indirect exposure to 19 oil and/or gas production permits in the Gippsland Basin operated by ExxonMobil,” the company said in its ASX announcement.

“The permits currently supply 40 per cent of the East Coast of Australia’s gas demand and should be a beneficiary of rising LNG demand.

“High Peak Royalties has no current intention to materially increase its shareholding in Royalco, but does reserve the right to review the level of its shareholding in the future.”

 

Website: www.highpeak.com.au