Altona Energy Plc Update on Joint Venture
28 July 2016 - 6:13PM
UK Regulatory
TIDMANR
28 July 2016
Altona Energy Plc
("Altona" or the "Company")
Update on Joint Venture
The Board of Altona (AIM: ANR) provides the following update for shareholders:
Further to recent discussions with the South Australian Government the board of
the Joint Venture company, Arckaringa Coal Chemical Joint Venture Co Pty Ltd
("JV Company") has been informed that, as well as its existing Exploration
Licences, it will need to obtain a Petroleum Exploration Licence ("PEL") before
it can commence test drilling at its Arckaringa site in South Australia. This
licence, which is governed by the Petroleum and Geothermal Energy Act (2000)
requires companies to conform to higher levels of regulation and is considered
necessary when extracting any type of hydrocarbon product (including extraction
by way of Underground Coal Gasification ("UCG")).
The JV Company proposes to comply with this new obligation and is reviewing the
required procedures. However, it is understood that the three Exploration
Licences relating to the tenements owned by Altona share a partial overlap with
PELA604, an application for a PEL owned by Linc Energy Ltd, which entered into
voluntary administration on 15 April 2016. As the area covered by this PEL
application is still valid despite Linc Energy being in administration, the JV
Company has been informed by the South Australian Government that it may need
to acquire this PEL it in order to commence any UCG activity on its tenement.
The Company has made representations to the South Australian Government
requesting assistance with the regulatory matter and will continue to liaise
with them in this regard.
The Company advises shareholders that the acquisition of the PEL may take a
number of months although the directors are not currently in a position to
state definitively how long the process will take. It is understood by the JV
Company that the relevant assets of Linc Energy are to be acquired by a third
party whose identity is unknown. The JV Company is attempting to establish the
identity of the purchaser and may then enter into negotiations to acquire the
right to apply for the PEL.
During this period of inactivity, the Board of Altona has agreed with its joint
venture partners, Sino-Aus Energy Group Ltd ("Sino-Aus") and Wintask Group
Limited ("Wintask") that the Joint Venture Agreement cannot be implemented as
contemplated. The Joint Venture partners will discuss possible variations to
the JV Agreement in due course to incorporate the change in timing as well as
the following matters:
* The Joint Venture Partners have agreed not to proceed with the second
subscription by Sino-Aus for 100 million ordinary shares of Altona at the
subscription price of 0.75 pence per share (to raise GBP750,000). The parties
will endeavour to re-negotiate the terms and timing of this subscription as
and when the PEL has been granted to the JV Company;
* as the partners of the JV Company have agreed that the project should be
postponed until the PEL is granted, the parties have agreed the return to
Sino-Aus its first tranche payment of AUD$5.4 million (less what has been
already spent on the project). Sino-Aus will deposit the funds into
short-term investment instruments, allowing it to generate a return.
Wintask will leave its first tranche payment of AUD$0.6 million with the JV
Company.
Finally, the reports being prepared by mining services company, Parsons
Brinckerhoff, have been completed; these being the UCG technology report and
the test drilling timetable relating to the proposed bankable feasibility
study. Therefore, once the licencing issue has been resolved, and the Joint
Venture terms renegotiated as required, the project will be in a position to
commence.
The Company will make further announcements on all of these matters in due
course.
-ends-
For further information, please visit www.altonaenergy.com or contact:
Altona Energy plc +44 (0)7769 906 686
Qinfu Zhang, Executive Chairman
Nick Lyth, Non-Executive Director
Leander (Financial PR) +44 (0)7795 168 157
Christian Taylor- Wilkinson
Northland Capital Partners Ltd (Nomad and +44 (0)203 861 6625
Broker)
Matthew Johnson / Gerry Beaney (Corporate
Finance)
John Howes / Abigail Wayne (Corporate Broking)
About Altona
Altona is listed on the London Stock Exchange's AIM market. Its principal
focus is on the evaluation and development of the Company's flagship Arckaringa
Project to exploit the significant coal resources contained in three
exploration licences covering 2,500 sq. kms in the northern portion of the
Permian Arckaringa Basin in South Australia. The Project is designed to
produce syngas products for the Australian market and export from a resource
exceeding 7.8 billion tonnes of coal (1.3 billion tonnes JORC compliant).
END
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