For Immediate Release - 19 January 2012
Ref. #004/12
ASX Ltd
Companies Announcement Office
Electronic Lodgement System
Dear Sir,
Beach Energy Limited (ASX: BPT, "Beach") is pleased to
announce that its wholly owned subsidiary, Delhi Petroleum
Pty Ltd ("Delhi"), has renegotiated a royalty agreement that
applies to Delhi's Cooper and Eromanga Basin assets, with
Esso Australia Resources Pty Ltd ("EARL"), a wholly owned
subsidiary of Exxon Mobil Corporation.
In 2004, Delhi entered into a confidential royalty agreement
with EARL as part of the sale of Delhi by EARL. Beach
acquired Delhi in 2006. This royalty agreement required Delhi
to pay EARL a percentage of revenue received from certain
product types.
The renegotiated royalty takes the form of an annual payment
to EARL of a percentage of the net cash flow (before
corporate tax) of Delhi's Cooper and Eromanga Basin business,
subject to minimum payment of $40 million over the first five
years. An additional one-off payment in the first year of $8
million has also been made.
The renegotiated royalty agreement is effective from 1 July
2011 and will expire on 31 December
2030.
The renegotiated royalty agreement is of mutual benefit to
both Delhi and EARL, taking into account the changing
dynamics of the Eastern Australian energy industry and
markets, and the significant growth potential of Delhi's
assets.
Beach's Managing Director, Mr Reg Nelson said "Renegotiating
the old royalty agreement has been important to ensure future
alignment between Delhi and EARL to facilitate long-term
capital investment that will drive significant growth
opportunities in the Cooper Basin."
EARL and Delhi have also resolved EARL's previous claim that
Delhi underpaid royalties due to
Delhi's method of calculating royalties.
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ASX Release
About Delhi Petroleum
Delhi Petroleum Pty Ltd is a wholly owned subsidiary of Beach
Energy Ltd and participates in various joint ventures located
in the Cooper and Eromanga Basins of central Australia. Delhi
has an interest in approximately 300 oil and gas fields and
associated key infrastructure, including the Moomba oil and
gas processing facility, the Port Bonython oil and gas
liquids plant, the Ballera gas processing facility, and the
Jackson oil processing facility.
Delhi produces sales gas, ethane, crude oil and gas liquids
from its Cooper and Eromanga Basin interests.
Exxon Mobil Corporation is the world's largest publically
traded international oil and gas company. ExxonMobil has
operations or market products in most of the world's
countries, and exploration activities for oil and natural gas
on six continents.
Yours sincerely,
Managing Director, FAusIMM
For more information contact CorporateReg Nelson | Beach Energy Ltd | 08 8338 2833 |
Investor Relations Chris Jamieson | Beach Energy Ltd | 08 8338 2833 |
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