Moby Oil shares surge after deal with Gascorp Market watch top headlines
MELBOURNE, Sept 29 AAP September 29 2009, 5:45PM Junior explorer Moby Oil and Gas Ltd has agreed to acquire Rankin Trend Pty Ltd, giving it a slice of what could prove to be one of the nation's largest gas plays.
Moby has agreed with Gascorp Australia Pty Ltd to purchase all shares in Rankin.
Rankin presently holds, or can hold, a 15 per cent interest in WA-360-P, a permit in the Carnarvon Basin off Western Australia, and a 50 per cent interest in WA-409-P. After the news, shares in Moby surged, ending the day up 28 cents, or 350 per cent, at 36 cents.
WA-360-P contains the Artemis Prospect, identified by permit operator MEO Australia Ltd as having an aggregate prospective resource of 20.3 trillion cubic feet of gas (Tcf), of which 12Tcf is expected to be recoverable.
Such a figure would make it among Australia's largest gas reservoirs, much bigger than Woodside's Pluto gas field, with 4.4 Tcf, but smaller than Gorgon, the nation's biggest field with 40Tcf.
Moby told the stock exchange on Tuesday that Artemis has been estimated by MEO to have a 32 per cent geological chance of success.
Under the deal, Moby would acquire Rankin by issuing 120 million shares, to be held in escrow for 12 months, to Gascorp.
The deal is conditional on MEO providing Rankin an irrevocable binding commitment to drill a well at WA-360-P on or before December 31, and getting necessary regulatory approvals.
Moby shareholders will also need to approve aspects of the deal.
Hartleys energy analyst David Wall said Moby typically went for high-risk high-reward plays.
"This looks like an outstanding deal for them," Mr Wall said.
"This is actually two reservoir horizons, one of which is considered more risky than the other, so there is 6Tcf at one and 6Tcf at another.
"Even though one is more risky than the other, it gives you two bites at the cherry, making the prospect in general have a greater chance of success," he said.
Mr Wall said that at an estimated worth of about one dollar per thousand cubic feet, the Artemis Prospect could be worth $12 billion.
"Moby is presently obtaining independent reports on WA-360-P and is not in a position to comment on MEO's assessment of the Artemis Prospect," Moby told the stock market.
"Moby is merely directing the attention of its members and the market generally to MEO's assessment of the Artemis Prospect as released by MEO.
"Investors should make their own assessment of the data released by MEO by accessing it from the MEO website," it said.
By Xavier La Canna
MOG Price at posting:
31.0¢ Sentiment: None Disclosure: Held
