Mineral Resources (MinRes) has reached an agreement with Hancock Prospecting (Hancock) on gas and oil assets in the onshore Perth and Carnarvon basins.
A binding Sale and Purchase Agreement will see Hancock acquire 100% ownership of MinRes Exploration Permits 368 and 426 in the Perth Basin, with two Joint Venture Agreements also established for the remaining onshore Perth Basin and Carnarvon Basin exploration acreage.
MinRes has made several significant gas and oil discoveries in Exploration Permits 368 and 426 since its first conventional gas discovery at Lockyer Deep-1, near Mingenew, in September 2021.
MinRes recently published maiden resources for the Lockyer Gas Project and Erregulla oil Project which indicated one of the largest onshore gas and oil discoveries in Western Australia, and has been reviewing options to best release value from its gas exploration ground.
In line with agreement terms, Hancock will pay MinRes an upfront consideration of $804 million and an additional price adjustment of $327 million, subject to meeting certain resource thresholds and classifications for Moriary Deep Prospect and Lockyer Gas and Erregulla Oil discoveries.
Upon completion of the transaction, Hancock will acquire 100% of EP 368 and EP 426, and a 50% interest in remaining Perth Basin and Carnarvon Basin exploration permits operated by MinRes.
This will also involve Hancock investment in Carnarvon Basin exploration activities, with near-term objectives including high-priority drilling and 3D seismic surveying.
MinRes will operate exploration joint venture assets and provide exploration and drilling services, while Hancock will purchase 50% of the MinRes Explorer drill rig, mobile village, ancillary plant and equipment. Joint venture management committees will comprise equal representation between the parties.
MinRes Chief Executive Energy Darren Hardy highlighted the strategic merit in forming a joint venture with Hancock, including the ability to bring forward drilling, reduce operating costs and provide funding support.
“MinRes and Hancock have a long history built on a strong relationship and I’m excited that we are again deepening our ties, this time in energy," Darren said.
“This transaction maximises the value of our exploration success for shareholders and again showcases our ability to unlock significant capital from MinRes’ portfolio of assets.
“The new exploration joint ventures with Hancock in the Perth and Carnarvon basins immediately derisk and accelerate our future exploration programs across this highly prospective onshore petroleum acreage.”
Completion of the transaction is expected by the end of 2024, subject to conditions including ministerial consents.