Molopo sells Chinese CBM assets

MELBOURNE’S Molopo Australia is selling its coalbed methane (CBM) interests in China, the company announced yesterday.

Under the conditional agreement, ASX-listed and CBM developer Molopo will get $300,000 of cash and shares and retain a US$0.125/gigajoule royalty on any gas production from the Liulin Field.

Molopo said the purchase by an Australian-based company, not named in a statement, was conditional upon final documentation, board approvals and the support of the Chinese partner, China United Coalbed Methane Corporation.

“The sale will allow Molopo to focus on its expanding gas production in Queensland and the appraisal of its very exciting gas assets in the Gloucester Basin and the United States”, Molopo managing director Stephen Mitchell said.

“The China CBM asset requires considerable resources to unlock its substantial potential.

“With Molopo retaining a production-based royalty on the asset, its shareholders will be able to share in the upside, without the capital expenditure requirements, if the Liulin CBM field is developed.”

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