State Gas (ASX:GAS) and Santos (ASX:STO) get new acreage in Queensland – The Market Herald

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  • Queensland Government names State Gas (GAS) and Santos (STO) as preferred bidders for two new gas exploration areas in central Queensland
  • The blocks are adjacent to or near State Gas’s Reid’s Dome and Rolleston-West projects and will increase its position by 60% to 2,630 square kilometers
  • State Gas will hold a 35% stake, while Santos will hold a 65% operating stake and will leverage its experience in gas production in the region.
  • Joint venture partners will now focus on obtaining relevant approvals before work begins
  • GAS shares are trading up 12% at 28 cents and STO up 1.79% to trade at $8.24 at 12:53 a.m. AEST

The Queensland Government has named State Gas (GAS) and Santos (STO) as preferred bidders for two new gas exploration areas in central Queensland.

PLR2021-1-2 and PLR2021-1-3 are adjacent to or near State Gas’s existing Reid’s Dome and Rolleston-West projects (to the west and north), as well as Santos interests to the east.

The new blocks cover a combined area of ​​1,035 square kilometers and will increase State Gas’ acreage position by approximately 60% to 2,630 square kilometers, with the potential to increase its resource position.

The energy stocks will own the exploration areas in a joint venture (JV) with State Gas to hold 35% and Santos to hold the majority stake of 65%.

Santos will also be the operator that will enable the JV to benefit from the vast experience of the ASX 200 company in the production of gas from Bandanna coals in the region.

Like the existing State Gas acreage, no blocks are subject to domestic gas reservation, meaning gas produced from the areas can be sold in any market.

State Gas Executive Chairman Richard Cottee said the two new blocks were a “significant addition” to the company’s existing portfolio.

“They will provide increased synergies in operations, synchronous development and the option to market gas,” Mr. Cottee said.

“I’ve always been a strong believer in the value of optionality and can confirm that with this award, State Gas’ flexibility is increased.”

Mr. Cottee also expressed his joy at establishing a working relationship with Santos.

“Santos is a major player in the industry, with a long history of safe and sustainable operations. Its extensive involvement in the region and its unparalleled experience with Bandanna coals, the primary target of these two new blocks and our Rolleston-West project, are particularly relevant here.

The joint venture partners will now focus on securing relevant environmental and other approvals for the areas to allow work to commence.

Shares GAS were trading up 12% at 28 cents and STO edged up 1.79% to trade at $8.24 at 12:53 a.m. AEST.

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