As first rumoured by Energy News Bulletin on Tuesday, Gina Rinehart, Australia's wealthiest individual, has now confirmed a significant stake in Mineral Resources (MinRes) onshore gas assets in Western Australia through a $1.13 billion agreement. The deal comes just a few years after Rinehart's high-profile bid for gas assets.
The acquisition sees Hancock Prospecting, Rinehart's mining empire, finalise months of negotiations with MinRes, led by Chris Ellison, transferring a substantial interest in its gas portfolio to Hancock. This strategic alliance underscores both Rinehart's and Ellison's ambitions to strengthen their stakes in Western Australia's onshore gas sector amid a turbulent energy landscape.
Mineral Resources, facing tax controversies involving the company's co-founder Chris Ellison and declining lithium prices, has agreed to sell its stake in its valuable Exploration Permits 368 and 426 located in the Perth Basin to Hancock Prospecting.
Additionally, it has entered into two Joint Venture Agreements for its remaining exploration acreage in the Perth and Carnarvon Basins, refocusing amid tough market conditions.
YOU MIGHT ALSO LIKE
Under the agreements, Hancock will pay MinRes a total cash consideration of up to $1.13 billion.
Warrego battle
After a lengthy and sometimes contentious struggle to acquire Warrego Energy, Ellison agreed in early 2024 to sell the company's shares in the Perth Basin specialist to Hancock's cash takeover offer. This decision came just three weeks after Ellison had purchased the shares at a higher price.
MinRes stated that it had chosen to reach another agreement with Hancock after receiving several inquiries from both domestic and international parties. Additionally, the significant drop in the price of battery metals affected its lithium mining assets.
MinRes CFO Mark Wilson told a webinar audience the deal allows the company to recycle capital and bring forward value.
"It allows us to retain significant exposure to gas, both in the Perth and Carnarvon basins, and it removes exposure to development costs going forward – I believe it's an excellent deal for our shareholders.
"We've partnered with a very well-respected and strong company that enables us to accelerate the development of exploration."
The market viewed the confirmation of the sale positively, with MinRes' share price rising by 18.2% in early trade.
MinRes is the largest petroleum and geothermal acreage holder in the onshore northern Perth and Carnarvon Basins after the company built a portfolio of conventional gas and geothermal energy assets to support its long-term business growth. The gas portfolio has the potential to power MinRes's mining developments.
The company said the transaction reflects the long-standing, value-enhancing relationship between MinRes and Hancock.
To complete the cash transaction, Hancock is offering an upfront consideration of $804 million for EP368 and EP426, payable upon the deal's completion, expected by the end of 2024.
Hancock must also make additional purchase price adjustments of $327 million for the Moriary Deep Prospect, Lockyer Gas, and Erregulla Oil discoveries.
Definition drilling related to the purchase price adjustment for the Moriary Deep Prospect and the Lockyer Gas discovery is expected to be completed during FY25, with the drilling of the Moriary-2 well to begin in November 2024.
