Under the deal announced to the market this morning, Beach Energy will transfer up to 60% of its interests in PEL 218 and ATP 855 to Chevron over two stages.
The first stage will involve transfer of a 30% stake in PEL 218 to Chevron in exchange for $36 million in cash and a $95 million carry.
Stage 1 also involves an 18% interest in ATP 855P being transferred to Chevron for $59 million in cash.
If Chevron elects not to proceed after the first stage, the interest held by Chevron will revert back to Beach for no consideration.
Stage 2 will involve Beach transferring a further 30% stake in PEL 218 to Chevron for $41 million in cash and a $47 million carry.
It will also give Chevron another 18% stake in ATP 855P for $36 million.
At the end of the second stage, Chevron will make a decision on whether to go ahead with further work.
If it does, Chevron will fork out another $35 million.
However, should it not proceed, Beach may elect to receive a reassignment of the interests held by Chevron.
At the centre of the deal is the Nappamerri Trough, which Beach Energy has been working hard to prove up in recent times.
The last well drilled at PEL 218 in Moonta-1 disappointed analysts with flow below expectations but Beach said the well had proved up the basin-centred gas concept.
The well flowed at a maximum controlled rate of 2.6 million cubic feet per day but dipped down to 1.6MMcfd.
Beach said that together with the results from Encounter-1 and Holdfast-1, it had proof that not only could the Roseneath-Epsilon-Murteree flow but the Patchawarra at PEL 218 could as well.
Meanwhile, over at ATP 855P, a joint venture between Beach and Icon Energy has just finished drilling the Halifax-1 well, which flowed at 2.23MMcf of gas on a constrained choke.
Beach previously told EnergyNews that it would take three to four weeks to figure out which frac stages were flowing and which were not.
Chevron told media it was excited by the opportunity to enter the Cooper Basin and leverage its onshore gas experience in the US.
"We have an industry-leading queue of LNG projects under development in Australia and this agreement provides an opportunity to explore a new, prospective basin and potentially add to our natural gas portfolio," Chevron Australia managing director Ray Krzywosinski said.
"The Cooper Basin is an established petroleum producing basin and provides the opportunity to leverage our expertise in tight gas."
For Beach boss Reg Nelson, the deal is a vindication of the work done on the permits to date.
"This transaction vindicates in many ways the vision the company has in relation to the potential of unconventional gas in the Cooper Basin," he said.
"We look forward to working with Chevron and Icon Energy in the continued rejuvenation of the Cooper Basin."
