26th Jun 2009 07:00
Altona Energy Plc / Index: AIM / Epic: ANR / Sector: Exploration & Production
26 June 2009
Altona Energy Plc ('Altona' or 'the Company')
Non-Binding Terms Sheet to facilitate a Joint Venture Agreement with
CNOOC New Energy Investment Ltd
Altona Energy Plc, the AIM listed Australian based energy company, through its wholly owned Australian subsidiary Arckaringa Energy Pty Ltd ("Arckaringa Energy"), has signed a Terms Sheet with CNOOC New Energy Investment Ltd ('CNOOC-NEI'), to facilitate agreement of a joint venture ('the Evaluation Joint Venture' or 'EJV') aimed at the completion of a bankable feasibility study ('BFS') for a coal mine and integrated coal-to-liquids and power co-generation project at Arckaringa in South Australia ('the Arckaringa Project').
It is anticipated that the EJV agreement will be conditional on, amongst other things, applicable Australian and Chinese regulatory and government approvals. A further announcement in regard of the EJV agreement will be made in due course.
The Terms Sheet, which is not legally binding, includes the 'in principle' agreement that, pursuant to the EJV, CNOOC-NEI will, immediately on the EJV becoming effective, be assigned a 51% interest in Arckaringa Energy's exploration licences EL3360, EL3361 and EL3362 in return for an ongoing commitment to fund all the costs of the BFS. The costs of the BFS will be determined in due course. In the event that CNOOC-NEI withdraws from the EJV prior to completion of the BFS, it is agreed 'in principle' that in certain circumstances Altona will have the right to buy back CNOOC-NEI's interest.
It is expected that the EJV agreement will incorporate mechanisms for the evaluation of other value added processing projects utilising Arckaringa Energy's coal resources, which contain a resource of over 7.5 billion tonnes of coal, (estimated according to the 1984 JORC equivalent code) of which 1.287 billion tonnes at the Wintinna Deposit have been brought up to current JORC standards (as announced on 1 September 2008).
The Terms Sheet anticipates that the projects identified for development and commercialisation under the EJV will be held by the parties through special purpose vehicles in which Altona's interest may vary from its 49% interest in the EJV.
Given the ongoing developments with CNOOC-NEI, Altona has deferred the appointment of the BFS Study Engineer until after finalisation of the Terms Sheet. However, important technical studies towards the BFS have been progressed.
Altona Chairman Chris Lambert said, "This is an exciting period for Altona. The signing of the Terms Sheet with CNOOC-NEI and the commencement of the EJV negotiations is a further significant achievement for the Company. We are delighted to be working with CNOOC-NEI."
"This signing follows a period of extensive due diligence by CNOOC-NEI, which commenced immediately after entering into an initial MOU with Altona in August 2008. Throughout this process we have received a great deal of positive support and assistance from the South Australian government, for which the Company remains extremely grateful."
**ENDS**
For further information visit www.altonaenergy.com or please contact:
|
Christopher Lambert |
Chairman |
Tel: +44 (0) 207 024 8391 |
|
Christopher Schrape |
Managing Director |
Tel: +44 (0) 207 024 8391 |
|
Samantha Harrison |
Ambrian Partners Limited |
Tel: +44 (0) 207 634 4705 |
|
Chris Welsh |
St Brides Media & Finance Ltd |
Tel: +44 (0) 207 236 1177 |
|
Hugo de Salis |
St Brides Media & Finance Ltd |
Tel: +44 (0) 207 236 1177 |
Notes to Editors:
About Altona
Altona Energy Plc is an Australian based energy company that was admitted to trading on AIM in March 2005. It's primary focus to date has been the completion of a bankable feasibility study for its wholly owned Arckaringa Project for an integrated 10 million barrel per year Coal to Liquid ('CTL') plant with a 560 MW co-generation power facility.
The Company holds, through its wholly owned subsidiary Arckaringa Energy Pty Ltd, a 100% interest in three exploration licences covering 2,500 sq. kms in the northern portion of the Permian Arckaringa Basin in South Australia. These include three coal deposits, Westfield (EL3360), Wintinna (EL3361) and Murloocoppie (EL3362). All three lie close to the Adelaide to Darwin railway and the Stuart Highway. Containing more than 7.5 billion tonnes of coal (based on non-JORC standards), these coal deposits are effectively one of the world's largest undeveloped energy banks, capable of conversion into clean liquid fuels, low cost power and high value industrial feedstocks.
About Coal-to-Liquids (also see www.altonaenergy.com)
CTL is a proven technology which converts coal into more environmentally clean and manageable energy sources including gas and synthetic fuels. The process involves two major stages, gasification to produce synthetic gas ("Syngas") rich in hydrogen and carbon, and a liquefication stage where the Syngas is reacted over a catalyst to produce high quality, ultraclean synthetic fuels and chemical feedstocks.
CTL is a prime example of clean coal technology - the associated combined cycle units produce negligible sulphur oxides, significantly less nitrogen oxides and 10 - 20% less CO2 per unit of power generated than a conventional coal fired plant, whilst carbon capture and storage offers the potential to reduce the overall greenhouse gas emissions from CTL to below the "well to wheel" level of fuels derived from crude oil.
The technology is best demonstrated in South Africa, where currently 30% of the country's gasoline and diesel fuel needs are met through CTL plants.
Related Shares:
Altona Energy