tap to sell down ghana

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Tap Oil Ltd. (TAP), an oil and gas explorer focusing on Thailand and Western Australia, said it has begun talks to sell a stake in its exploration project off Ghana and ?all of its assets are for sale at the right price.?

Tap is considering cutting its interest in the block off Ghana?s capital, Accra, to as low as 10 percent from 40 percent, while also pursuing a buyer for its 39 percent stake in a Brunei oil and gas project, Troy Hayden, chief executive officer of the Perth-based company, said in a phone interview today.

?There?s a fair bit of interest? in the area of the Ghana permit, near Tullow Oil Plc (TLW)?s Jubilee oil discovery, said Hayden, a former Woodside Petroleum Ltd. (WPL) executive who started as CEO of Tap in December. ?It?s not a bad address to be in, and we?re going to turn out to be an Asian, Australian-focused company.?

Tap, which fell 26 percent in Sydney trading last year, aims to increase its value and counter declining output by concentrating on developing prospects in areas such as Australia?s Carnarvon Basin and the Gulf of Thailand and disposing of other assets.

A decision to proceed with the Manora oil project off Thailand, operated by Pearl Energy Ltd., could be made by the end of this year, compared with a prior target of the first half of 2012, Hayden said. Tap expects it will spend A$50 million ($54 million) to A$60 million to develop the Manora venture through early 2014, when production is due to begin, he said.

?Our existing assets have been great producers while they?ve lasted, but they are in decline, so we need to replace some of that production and Thailand is going to do that,? Hayden said. ?We want to get after things, and that means getting some of these decision points reached earlier.?

Australian LNG

Tap is likely to finance all of the Thai project costs with debt and expects it will be able to meet its 2011 spending requirements with its A$63 million in cash, he said.

Tap, whose shares have risen 12 percent since Hayden started Dec. 1, fell 4.7 percent to 91 Australian cents today. The benchmark S&P/ASX 200 Index dropped 0.2 percent.

?Tap needs to monetize assets,? according to Hayden. ?We can?t just sit on them. We need to keep things moving.?

Tap agreed to sell 25 percent of the WA-351-P exploration permit in the Carnarvon Basin to Japan Australia LNG Pty for $30.2 million, lowering its stake to 20 percent, the Australian company said May 4. The transaction follows Tap?s acquisition of a further 20 percent stake in the permit for $15.8 million.

Japanese Venture

Tap and partner BHP Billiton Ltd. (BHP) plan to drill an exploration well in the first quarter of next year, quicker than previously anticipated, he said. Their first well may cost as much as A$60 million, Hayden said. The Japanese venture, between Mitsui & Co. and Mitsubishi Corp., agreed to pay as much as $10 million of Tap?s share of the well cost, Tap said on May 4.

Tap may sell more of the venture, which has the potential to feed a liquefied natural gas project in Western Australia such as the proposed expansion of Woodside?s Pluto project or the Wheatstone and Gorgon ventures led by Chevron Corp. (CVX), he said.

Tap reported a gas discovery at the Apache Corp (APA).-operated Zola-1 well in the Carnarvon Basin in February. While the cost of the rig for Zola was A$1 million a day over a 120-day period, Tap hasn?t yet calculated the final cost, he said.

To contact the reporter on this story: James Paton in Sydney [email protected]

To contact the editor responsible for this story: Amit Prakash at [email protected].