Santos increases its CSM assets

Santos Ltd., Adelaide, increased its coal seam methane (CSM) assets in Australia with a corporate acquisition and an acreage buy in the Gunnedah basin of northern New South Wales.

Jul 7th, 2009

Rick Wilkinson
OGJ Correspondent

MELBOURNE, July 6 -- Santos Ltd., Adelaide, increased its coal seam methane (CSM) assets in Australia with a corporate acquisition and an acreage buy in the Gunnedah basin of northern New South Wales.

The company acquired 19.9% interest in Sydney-based CSM explorer and producer Eastern Star Gas Ltd. from ESG’s major shareholder Hillgrove Resources Ltd. for A$176 million.

In addition, Santos paid Gastar Exploration Ltd. A$300 million for its 35% interest in several Gunnedah basin permits and production areas operated by ESG.

Santos said the Gunnedah area could be the country’s second major CSM province after the Surat-Bowen basin of eastern Queensland.

The combination of ESG and Santos permits in northern New South Wales will cover some 63,000 sq km. Santos estimates a resource potential in excess of 50 tcf of gas.

Santos first entered the region in 2007 and is undertaking a 23-well exploration program. ESG has been in the basin since 2002.

ESG’s Narrabri CSM joint venture’s drilling program is on track to delineate 1,300 petajoules of proved and probable CSM gas reserves by the end of this year.

More in Companies