another big player enters the canning basin

Fortescue moves into oil sector
FORTESCUE Metals Group has made a surprise entry into the oil and gas exploration sector, signing an up to $14 million, non-binding deal to take an 18 per cent stake in explorer Oil Basins and a 25 per cent stake in West Australian shale ground near Derby.
Oil Basins duly announced it planned to become the “new third force” in developing the onshore Canning Basin’s shale. Presumably the other two forces are Buru Energy and New Standard Energy, who have interests in the Canning.

Oil Basins said it was the first investment outside iron ore by Fortescue, who made its name as the third force in iron ore by breaking the Pilbara duopoly of Rio Tinto and BHP Billiton.

Fortescue did not put out its own release on the investment and was not immediately available to comment.

If a binding deal is signed, Fortescue will buy 120 million new shares at 3.5 cents each at a cost of $4.2m, and be issued up to 146 million options.


It will also be offered a farm-in agreement for 25 per cent of a permit known as the Derby Block in exchange for $10m of exploration work.

Oil Basins shares jumped 1c to 4.1c on the announcement.