Vic. Govt decision forces Kipper handback, at a price?

The bubble burst yesterday for what was the rejuvenated Anzon Energy after Woodside Petroleum terminated its agreement under which it was to acquire Woodside’s 30% interest in Retention Lease VIC/RL2, containing the Kipper gas field, in the Gippsland Basin offshore southern Victoria.
Vic. Govt decision forces Kipper handback, at a price? Vic. Govt decision forces Kipper handback, at a price? Vic. Govt decision forces Kipper handback, at a price? Vic. Govt decision forces Kipper handback, at a price? Vic. Govt decision forces Kipper handback, at a price?

A Victorian government refusal to grant Anzon a renewal of the retention lease forced the move. Instead the Department of Primary Industries said it considered production from the field to be commercially viable and therefore refused the request. Woodside is still to make an application for a production licence.

Woodside had previously agreed to sell to Anzon its Bass Strait assets VIC/RL2 (30%), VIC/RL6, VIC/RL9 and VIC/RL10 (100%) for $65 million subject to joint venture approvals.

Although unable to comment on the details of the deal Anzon managing director Steve Koroknay said the company was ‘smiling all the way to the bank’. He said Anzon is now part of a group of companies bringing the Ocean Patriot drilling rig to the basin for an extended program at the end of 2004.

Woodside had no comment on the deal except to say that it was committed to fulfilling its obligations to the JV. If Koroknay’s implication is correct that Anzon booked a profit on the deal, it means Woodside has paid a premium to reacquire acreage it deemed peripheral only months ago.

The sale of Woodside’s interests in the three permits was completed in mid-March 2004.

A statement yesterday said “Woodside also considers that production from Kipper is currently commercially viable and as a consequence of the Department’s decision, the joint venture now has one year to apply for a production licence.”

The unlisted junior Anzon had snuck under the radar to grab the Bass Strait acreage including the Kipper, Basker, Manta and Gummy oil and gas fields in the privately-funded deal in February.

At the time Woodside's gas business unit director, David Maxwell, said the Bass Strait assets were acquired from 1999-2002 as a foundation for the company’s move into the south-east Australian gas market.

"The subsequent discovery of the Thylacine and Geographe gas fields in mid-2001 in the Otway Basin have caused us to shift our focus to the development of those assets," Maxwell said.

The other participants in the VIC/RL2 joint venture are Esso Australia Resources Pty Ltd (operator) 25%, BHP Billiton Petroleum (Victoria) Pty Ltd 25% and Santos controlled entities 20%.

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