Mineral Resources has announced a $1.1bn agreement with Hancock Prospecting involving its oil and gas exploration assets.
MinRes and Hancock have finalised a binding Sale and Purchase Agreement, under which MinRes will sell 100% of its Exploration Permits (EP) 368 and 426 in the Perth Basin to Hancock.
Additionally, the companies will enter two Joint Venture Agreements covering MinRes’ remaining exploration acreage in the Perth Basin and the Carnarvon Basin.
Hancock will provide MinRes with a total cash payment of up to $1.13bn under these agreements.
Last month, MinRes announced it was exploring options to maximise the value of its gas exploration assets following multiple inquiries from both domestic and international parties. JP Morgan has been advising the company in this process.
This transaction highlights the longstanding, value-focused partnership between MinRes and Hancock, both prominent Western Australian leaders in resource development, as they contribute to the state’s future energy landscape.
The transaction proceeds from Hancock will be paid in cash comprising an upfront payment of $804m for EP368 and EP426, due upon completion and subject to limited conditions precedent, including necessary ministerial approvals. Completion is anticipated by the end of 2024.
Additional purchase price adjustments of $327m, contingent upon reaching specific resource thresholds and classifications for the Moriary Deep Prospect and the Lockyer Gas and Erregulla Oil discoveries. Definition drilling related to these adjustments for the Moriary Deep Prospect and Lockyer Gas discovery is expected to conclude during FY25, with drilling of the Moriary-2 well set to begin in November 2024.
Upon transaction completion, Hancock will acquire full ownership of EP368 and EP426 (see Figure 1) and gain a 50% interest in MinRes’ remaining permits in the Perth Basin and Carnarvon Basin (Exploration JV1).
MinRes will retain a 50% stake in the Exploration JV assets, maintain its role as operator, and receive initial funding to support the priority work programme in the Carnarvon Basin.
If a commercial discovery is made and both parties agree to proceed with development, Hancock has committed to cover 100% of the post-FID development costs for the Exploration JV assets. MinRes’ share will be carried at a commercial interest rate on agreed reasonable terms.
MinRes chief executive Energy Darren Hardy said: “MinRes and Hancock have a long history built on a strong relationship and I’m excited that we are again deepening our ties, this time in energy.
“This transaction maximises the value of our exploration success for shareholders and again showcases our ability to unlock significant capital from MinRes’ portfolio of assets.
“The new exploration joint ventures with Hancock in the Perth and Carnarvon basins immediately derisk and accelerate our future exploration programmes across this highly prospective onshore petroleum acreage.”
