AN INDEPENDENT assessment of Carbon Energy’s Surat basin gas assets has valued them at more than three times the company’s current market capitalisation.
The valuation, conducted by Xstract Mining Consultants, have valued the company’s in situ gas assets at between $91 million and $600 million, with a preferred valuation of $205 million.
At close of trading on 15 October, Carbon Energy was valued at $63 million.
Carbon Energy said the independent expert had fully risk weighted its valuation being cognisant of the current policy regime as it pertains to underground coal gasification (UCG) development, in addition to the likely capital costs to bring the Blue Gum Gas Project into production.
“Should either of these key risks be resolved Xstract considers there would likely be a sizable uplift in the valuation,” the company said.
Carbon Energy noted that of significance was the fact the valuation had been undertaken prior to a Queensland Government decision around the future of UCG in Queensland.
Carbon Energy chief executive Morné Engelbrecht said the valuation followed the company’s recent significant gas reserve upgrade.
“As we proceed further down the path of de-risking our Blue Gum Gas Project in Queensland, we will continue to build on the value of our Surat basin gas assets,” he said.
The company’s 2P gas reserves were upgraded to 1,128 petajoules of natural gas equivalent or 188 million barrels of oil equivalent.