beach petroleum open to csg sale

Beach Petroleum open to CSG sale
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The managing director of Adelaide-based oil and gas group Beach Petroleum Limited says he could be persuaded to sell part of the firm's booming coal seam gas assets.

In an exclusive interview with Business Spectator, Reg Nelson said that the firm's 40 per cent share of its joint venture with Arrow Energy could be up for grabs.

Mr Nelson said Beach's stake, with a current a book value of just $40 million, would be worth much more to one of the world's oil majors, including Shell, Petronas or BG. The recent M&A frenzy around gas reserves has pushed the value of the holding to around $1 billion.

"If you look at the larger companies that are coming in, clearly they want to put their foot on a large resource base for the future," he said.

"So if Shell wants to buy a big part of it, if BG wants to buy a big part of it, then clearly there's long term value in that."

"If it's a very attractive offer we'd have to consider it."

Mr Nelson also revealed that Beach has pre-emptive rights over the proposed sale of Arrow's 30 per cent JV stake to Shell, although he said he was unlikely to exercise them.

"Once we've had a chance to look at the transaction, we would probably want Shell as a partner," he said.

On June 8, Arrow announced Shell would pay $776 million for a 30 per cent share of Arrow's upstream assets, one of many deals that has bolstered the CSM and LNG sectors as the price of oil surged.