MEO Australia has announced plans to sell either all or part of its Tassie Shoal Methanol and LNG projects, located off the coast of the Northern Territory.
Company managing director Jürgen Hendrich said the company had taken note of the interest expressed by third parties in the projects, along with other recent transactions in the region.
“We feel now is the time to offer equity in the Tassie Shoal Projects to other participants who can further enhance the value of the projects,” he said.
“With its prime location and strong underlying demand for the Tassie Shoal production stream, we believe the Projects provide significant early-mover advantage to an acquirer.”
“The company has established relationships with key technology providers, secured environmental approvals and obtained Major Project Facilitation status from the Government,” he said.
The Tassie Shoal area could potentially host two 1.75 million tonne per annum methanol projects, with the potential to accept gas with a carbon dioxide content of up to 30 per cent.
They also provide the opportunity to develop a 3 million tonne per annum LNG facility which MEO said could provide material cost savings relative to other local LNG development options.
The fields are located about 275 kilometres from Darwin.
Approvals under the Environment Protection and Biodiversity Conservation Act that cover the Tassie Shoals remain current until 2052, with LNG Project environmental due for its next five-yearly review in 2017.
MEO has appointed UBS to help it off load a portion of the projects, which Mr Hendrich said the company had continued to de-risk over the years.
“Funds generated from this value realisation initiative will allow MEO to pursue several opportunities to acquire near term cash generating assets consistent with this strategy. In parallel, we will continue to invite offers for participation in any of our assets across the portfolio,” Mr Hendrich said.
MEO’s other assets comprise seven Australian permits – five of which it operates – and a producing oil discovery in New Zealand.
MEO is now entitled to a 30% stake in oil production from two wells on its New Zealand permit, PEP 51153, after completing drilling of its Puka 3 well.
Mr Hendrich said that while the company was successful in locating a thicker reservoir section, the shallower than expected oil-water-contact had made the well was uncommercial.
It would use the well results in deciding whether to continue work on the permit.
The news came as the company extended notice dates under a farm-in agreement with Eni Australia over the NT/P68 project area in the Timor Sea.
Eni, which is operator of the permit, was required to inform MEO whether it would acquire a further 25 per cent stake in the permit, as well as drilling a second well, by 29 August.
This date has been extended to 28 October, which Mr Hendrich said would give Eni further time to complete quantification of the discovered resources and determine its future strategy.