QGC steps into VicPet row

A HEAVYWEIGHT has pushed its way into the brawl at Victoria Petroleum. Coal seam methane producer Queensland Gas Company has acquired 19.85 million shares in VicPet, 7.13% of shares on issue.
QGC steps into VicPet row QGC steps into VicPet row QGC steps into VicPet row QGC steps into VicPet row QGC steps into VicPet row

The company's board is currently under siege from two competing groups seeking a spill and the appointment of new directors at an extraordinary general meeting to be held on March 27.

Resources investor Eddie Smith - who is also chairman of Cooper Basin junior Impress Energy and a director of Austrlian Woprldwide Exploration - is trying to have himself and associates placed on the board, while Odin Energy is also attempting to place nominees on the board.

Both factions have built up significant shareholdings in the company.

VicPet managing director John Kopcheff welcomed Queensland Gas Company's intervention.

"VicPet is pleased to welcome QGC as a new substantial shareholder in VPE," he said.

QGC, which has a market capitalisation of about $2.5 billion is a partner with VicPet in the Surat Basin, Queensland CSM permit, ATP 574P, and is believed to be watching the junior explorer's promising progress at other Surat CSM prospects.

VicPet has now hired PR agency Porter Novelli to help get its message out.

A Porter Novelli staffer told PNN that Odin and Impress were focused on Cooper Basin oil and conventional gas operations, and neither understood nor appreciated VicPet's potential in CSM.

"QGC has chosen to take a strategic stake in those assets," he said.

"It's an endorsement of VicPet's approach to building up an asset base in the Surat Basin."

Kopcheff said VicPet shareholders should be wary of junior players who could not bring value to the company, and compared the records of Odin Energy and Impress Energy unfavourably with that of QGC.

He said VicPet anticipated strengthening its relationship with QGC which started in 2001 when QGC initially farmed in to the ATP 574P Walloon Coal Measures.

"VicPet looks forward to continuing to work closely with QGC as the operator of the ATP 574P coal seam gas project, and the opportunity this provides to benefit from QGC's proven technical expertise and access to QGC's production and marketing infrastructure," he said.

"A development drilling program is planned to commence in ATP 574P in mid 2008, subject to joint venture approval, with a five-well drilling program to achieve an initial target certification of 50 billion cubic feet [of CSM gas]."

VicPet is also undertaking the first phase of an exploration and appraisal program in partnership with Bow Energy at the Don Juan project area immediately west of Sunshine Gas' Lacerta CSM project

The participants in the ATP 574P Walloon Coal Measures Joint Venture are: QGC 60% and operator, Victoria Petroleum 30%, Arrow Energy 6.25% and Bow Energy 3.75%.

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