tap oil beats woodside in roc stake sale

Published 4:10 PM, 20 Jan 2011 Last update 4:42 PM, 20 Jan 2011


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AAP

Tap Oil Ltd has increased its stake in a gas-prospective permit in the Carnarvon Basin offshore Western Australia by snapping up ROC Oil Company Ltd's interest, beating bidder Woodside Petroleum Ltd.

ROC in December agreed to sell its 20 per cent interest in the WA-351-P permit to Woodside, which is not a party to the existing joint venture, for $US15.75 million in cash.

But Tap Oil, as a 25 per cent participant, exercised a pre-emptive right to bid for ROC's stake and on Thursday announced it had knocked Woodside out of the running, offering the same terms as Woodside.

Tap now has an interest in the permit of 45 per cent, while BHP Billiton Ltd's petroleum division remains the operator with a 55 per cent stake.

Tap chief executive Troy Hayden said the company saw the permit as being a core asset in its portfolio.

The company is already active in the Carnarvon Basin, participating in a gas joint venture on Varanus Island with Apache Energy Ltd.

"WA-351-P offers significant leverage to large potential gas resources at a time when there is competition between several LNG (liquefied natural gas) players to find gas for their expansion plans," Mr Hayden said.

It is well known in the market that Woodside seeks to either acquire or find more gas to underpin expansion of its Pluto LNG project near Karratha.

The gas in the WA-351-P permit, which is in deep water, would take several years and costly wells before entering production, so ROC decided to monetise the asset as it is seeking projects with nearer term production.

ROC spokesman Matthew Gerber said the company sought pre-appraisal and development opportunities.

WA-351-P is adjacent to a permit held by US oil and gas producer Hess Corporation where it has made 11 discoveries out of 14 wells.

Shares in Tap ended 1.28 per cent stronger at 79 cents, beating a 1.05 per cent fall in the benchmark index, while ROC shares ended 1.28 per cent lower at 39 cents and Woodside shares shed 1.22 per cent to $42.77.