Under the deal, WestSide will earn a half stake in ATP 688P (Tilbrook), ATP 693P (Cullin), ATP 769P (Paranui) and ATP 811P (Foxleigh). The company also has the right to purchase the initial 250 billion cubic feet (Bcf) of gas as feedstock for its downstream ammonia operations.
In return, it will spend $10 million on exploration and appraisal work over the next 22 months, in addition to having already paid a $1 million acquisition fee and allocating 1 million shares to Sunshine once it lists on the Australian Stock Exchange.
“Sunshine Gas believes this farm-in represents good value and is mutually beneficial to both companies,” managing director Tony Gilby said.
“Funds provided from the farm-in will accelerate the progress of Paranui and Tilbrook towards reserve certification and then production.”
To remain as operator of the permits, Sunshine will have the right to independently sell its share of gas after the initially contracted 250Bcf.
WestSide has now closed its initial public offering, in which it raised $29.5 million, and expects to list on the ASX next Tuesday, January 9.
WestSide plans to build a 1000 tonne per day ammonia plant in the Gladstone vicinity to use existing port infrastructure.
The company has said it believes the ammonia market will continue to strengthen in the region as demand for ammonia nitrate increases along with the demand for ammonia-based fertilisers.
