Sydney Gas names new CEOEmail Print Normal font Large font...

Sydney Gas names new CEO
Email Print Normal font Large font January 14, 2008 - 3:19PM

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AdvertisementSydney Gas Ltd has formed a partnership with AJ Lucas Group Ltd to help the Australian energy company develop its coal seam gas assets, and named a new chief executive.

Sydney Gas said the partnership with the coal seam gas services group will give it access to up to $47.2 million of additional capital to accelerate its exploration and development activities.

The company's incoming boss, Andy Lukas, has more than 30 years experience in the pipeline and drilling industry in the United States and South East Asia, and is joining Sydney Gas from Lucas.

As technical director, he helped develop Lucas into the largest coal seam degasification company in Australia, Sydney Gas said.

Under the agreement, Lucas will provide $20 million upfront to Sydney Gas through a placement of 52.5 million Sydney Gas shares at 38 cents each.

It will also provide an extra $27.2 million over three years in exploration and development capital upon exercising two tranches of performance-linked options.

"Today's agreements are key steps in the development of Sydney Gas," Sydney Gas executive chairman John Saunders said in a statement.

"We have potentially great resources in Camden and the Hunter and the involvement of Lucas, which has an outstanding record in coal and seam gas, will provides the expertise and support that we need to make Sydney Gas the success that it deserves to be."

Lucas currently owns and operates 52 rigs in the Bowen Basin, Hunter Valley, Camden and the Gunnedah Basin.

Lucas executive chairman Allan Campbell said Lucas is already drilling at Camden where it has increased gas production assets.

The agreement would assist in commercialisation of its coal seam gas.

"We believe that our participation in the Hunter Project can add further significant value," he said.

In 2005, Sydney Gas sold 50 per cent of its assets to AGL Ltd and entered into a joint venture with AGL to develop its tenements, including the Hunter Gas Project, which is currently in planning and appraisal stage.

As part of the deal with Lucas, Mr Campbell, will be appointed to the Sydney Gas board.

A meeting of Sydney Gas shareholders will be held in March to approve key elements of the agreements.

Sydney Gas first flagged a deal with Lucas in December.

Former chief executive Robert Neil resigned as chief executive on September 17 last year, just weeks after his appointment was announced.

The company then said in November it was undertaking a strategic review to find ways to ramp up the value its coal seam gas resources.

© 2008 AAP