The two companies agreed to work closely to aggregate various natural gas deposits in Western province in support of a venture that could potentially export three million tonnes of liquefied
natural gas (LNG) annually, they said.
The share price of recently listed Kina Petroleum soared by 15% or A$0.03 yesterday to A$0.23; New Guinea Energy rose 12.28% to A$0.64 and Horizon Oil shares surged 6.9% to A$0.31 on the back of the news.
News that the P’nyang South 1 well had shown elevated gas readings at the top of the Toro sandstone interval helped Oil Search to a year’s high of A$7.07, up A$0.11 or 1.58%.
Oil Search has gained more than 10% in the last five trading days.
With hundreds of PNG investors likely to benefit from these gains – more than 27 million shares changed hands yesterday in the four listed PNG oil and gas stocks – the news brightened prospects that condensate exports from the Stanley field could commence by the end of next year.
The Talisman announcement yesterday at its headquarters in Calgary, Alberta, said the farmout agreement with Mitsubishi was subject to approval by the PNG government and its joint venture partners.
“Following the farmout, Talisman and Mitsubishi licenced equity positions will average 40% and 20% respectively in these nine licences,” it said.
Horizon Oil and Kina Petroleum are the two most immediate beneficiaries.
Horizon holds 45% equity in PRL 21, where the Elevala wet gas field is located and 50% in PRL 4, where the Stanley gas-condensate project is currently being
planned. Kina has 15% equity in PRL21.
Talisman, which made its entry into PNG in 2001, is listed on the Toronto and New York Stock exchanges.
It has a market capitalisation of about A$14 billion (K31 billion) compared to around A$8.5 billion for Oil Search.
“Talisman is delighted to have MC as a strategic partner in our onshore licences in PNG,” Paul Blakeley, executive vice-president, International Operations East, said.
“MC brings extensive experience in LNG development and marketing and I am confident they will be a key success factor in helping us unlock the value of our PNG assets.
“Talisman intends to commence a four-well drilling programme on PPLs 235 and 261 during 2012, as well as ongoing appraisal in PRL 21.”
Mitsubishi has been involved in the LNG industry since 1969.
It operates in 80 countries through a network of more than 500 companies with a 60,000-strong workforce.
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