BRISBANE explorer WestSide is one step closer to sealing a deal with Mistui E&P Australia, where 49 per cent of WestSide’s 50 per cent joint venture interests in the Bowen Basin will be acquired by the Japanese subsidiary for $11.5 million.
Under the terms of the farm-in option, Mistui will pay a sum equivalent to 49 per cent of West Side’s exploration costs within the tenements.
This will give Mitsui a 24.5 per cent interest in those tenements, while WestSide’s interest in each tenement will reduce from 50 per cent to 25.5 per cent, subject to receipt of a waiver of pre-emptive rights from QGC – WestSide’s existing joint venture partner in those areas.
WestSide’s chief executive officer Dr Julie Beeby welcomed Mitsui’s decision to expand the existing alliance to include the company’s other prospective Bowen Basin tenement interests via a three-way exploration joint venture with Liquefied Natural Gas (LNG) project developer QGC.
“Subject to receipt of QGC’s waiver, these farm-ins will significantly strengthen WestSide’s joint venture relationship with Mitsui and credentials as an effective, low-cost operator and validate the Meridian Seam Gas joint venture’s LNG strategy,” she says.
Beeby says WestSide had $36.3 million in cash at December 31 2010 and remained well funded to undertake planned work programs within its tenements into calendar 2012.
“The additional funds from the farm-ins will provide WestSide with greater financial flexibility to accelerate reserves expansion exploration and production programs at Meridian SeamGas.”
Meanwhile, Queensland Treasurer Andrew Fraser has called for a fairer GST distribution methodology that promotes growth ahead of the Ministerial Council of Federal Financial Relations in Canberra today.
"The undeniable fact is that under current arrangements, Victorians and New South Welshmen benefit more from the resources sector than Queenslanders and Western Australians," says Fraser.
"What incentive does this offer to resource states to provide the billions of dollars in public investment necessary for a sustainable and lucrative mining industry?
"Currently mining revenue comprises 7 per cent of all revenue collected by all states, yet it constitutes 76 per cent of the GST funds that are distributed based on states' revenue raising capacity.
"The way the current methodology works, Queensland ends up keeping funds which amount to $228 per person in revenue from mining compared with $315 per person in New South Wales and $343 per person in Victoria.
"The Queensland Government takes its role as a donor state seriously - but we should be donating to our smaller states, not Victoria and New South Wales. The resource states have done the heavy lifting in supporting the nation's growth and our export success.
"It is in the national interest to encourage the resource states to continue to promote that growth not stunt it."
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