BASS Strait Oil Company (BSO) has provided details of its decision to sell its stake in two onshore permits in Victoria to Lakes Oil.

Under the terms of the sale, Lakes Oil will acquire a 100 per cent equity in PEP 167 and 17 from BSO and be responsible for the ongoing work program in return for a $300,000 cash payment.

The transaction is expected to be finalised once regulatory approval has been received which is anticipated to be finalised shortly.

BSO had determined the Otway basin assets were non-core to its future following a review of its business.

“The company remains committed to onshore exploration in the western portion of the Otway basin via its equity in PEP 150,” BSO said.

Lakes Oil said the permits were well placed in regards to pipelines and infrastructure.

“As we have demonstrated in recent times, there is a big demand for onshore gas in Victoria,” the company said.

“With new technology, we believe commercial recovery can be obtained from targets which in the past were considered uneconomic.”

BAS said its strategic review had delivered expenditure savings, which together with the additional funds from its non-core asset divestment, would enable it fully review its forward strategy for its Gippsland basin portfolio which could include more divestment or a farm-in.

The company has engaged GMP Securities to assist it in the process and plans to provide a further update on activities in its Gippsland basin portfolio in the short-term.

“With the divestment of PEP 167 and PEP175, the company is well placed to ensure the value of its Gippsland basin portfolio, now enhanced by the Cooper acquisition of BMG, is able to be realised in a structured process that will yield the best outcome for all our shareholders,” BSO chief executive Steven Noske said.