Joint Venture announcements

THE BOURSE WHISPERER: With the APPEA Conference kicking off in Perth
this week our JV update has a bit of an Oil & Gas feel about it.

ROC 2P Reserves increase by 71 per cent TO 20.9 mmboe

Roc Oil Company (ASX: ROC) announced its proved plus probable (2P) petroleum reserves have increased to 20.9 million barrels of oil equivalent (mmboe) as at 1 January 2014.

The 2P reserves increase of 8.7 mmboe (economic interest to ROC 50 per cent) from 12.2 mmboe at 31 December 2013, represents a 71 per cent increase and is attributable to the farm in by ROC to the D35, D21 and J4 PSC (Fields), located offshore Malaysia.

The Fields also provide access to 2C Contingent Resources of 39.8 mmboe (economic interest to ROC 50 per cent).

The sale of BMG has reduced 2C resources by -14.6 mmboe, giving a net 2C position to ROC of 48.8 mmboe (economic interest).

Best estimated Prospective Risked Resources have also increased from 31.6 mmboe to 43.6 mmboe with the inclusion of prospective volumes within the Fields.

Cooper Energy acquires Gippsland Basin project

Cooper Energy (ASX: COE) has agreed to purchase a 65 per cent interest in the Basker/Manta/Gummy gas and liquids project (BMG) in the offshore Gippsland Basin through acquisition of a 65 per cent interest in  each of the production licences: Vic/L26; Vic/L 27; and Vic/L28.

Cooper Energy will also be appointed Operator for the project.

As a result of the acquisition, Cooper Energy will have the majority interest in a gas and liquids resource it claims is considered likely to be a competitive conventional source of gas supply for eastern Australia in the coming years.

The acquisition, which is effective from 1 January 2014, is subject to regulatory approval.

The BMG project contains undeveloped liquids-rich gas and oil which Cooper Energy intends to review and quantify to include in its year-end review and estimate of reserves and resources.

The project comprises the Basker oil and gas field, Manta oil and gas field and the Gummy gas discovery located 65 kilometres offshore Victoria.

Cooper Energy is to acquire its 65 per cent stake through acquisition of:

A 50 per cent interest from ROC Oil Company Limited (ASX: ROC) for consideration of $1 million (plus working capital adjustments which will be negligible) and a deferred payment of $5 million contingent on first hydrocarbons production from a commercial development; and

A 15 per cent interest from Beach Energy Limited.

As a part of the acquisition Cooper Energy will assume any abandonment liability for the interests being purchased.

This equates to 39 per cent of any abandonment liability in the period to October 2018 and then 65 per cent of any abandonment liability thereafter.

The BMG joint venture equity structure following the completion of the agreement will comprise Cooper Energy (65 per cent interest and Operator) and Beach (35 per cent interest).

“The eastern Australian gas market is developing as we anticipated, the gas supply outlook is becoming increasingly tight and the upstream gas prices are increasing,” Cooper Energy managing director David Maxwell said.

“We believe that the BMG joint venture has the right features for a new foundation economic gas supply to the eastern Australian gas customers in the medium term.”

Catalyst Metals signs Farm-in Agreement with Navarre Minerals

Catalyst Metals (ASX: CYL) has signed a Term Sheet with Navarre Minerals (ASX: NML) to enable Catalyst to earn a 51 per cent equity interest in the Tandarra project (EL 4897) located north of Bendigo in Victoria.

This transaction will result in a regional consolidation of two of the most prospective greenfields gold projects in Victoria and means that the entire 60 kilometre strike length of the Bendigo North Goldfield will be under single management for the first time.

The rationalisation will enable synergy benefits and shared technology to be realised in both exploration and development stages.

As part of the same transaction, Navarre will transfer to Catalyst its interests in two gold projects owned by Castlemaine Goldfields Limited (a subsidiary of LionGold Corp), which are subject to farm-in and joint venture arrangements between Navarre and Castlemaine.

Navarre has earned a 51 per cent interest in the Sebastian project (EL 4536 and EL 4974) and is earning a 51 per cent interest in the Raydarra project (EL 5266).

Navarre will maintain exploration upside by way of a 1 per cent net smelter royalty on Catalyst’s entitlement to proceeds from future production from the Sebastian and Raydarra projects.

Navarre shareholders will also have exposure to Catalyst’s Four Eagles gold project through Catalyst shares.

The parties have agreed to finalise and execute a binding Heads of Agreement expeditiously following satisfaction of conditions precedent.