Clontarf Energy (AIM:CLON) PLC, a lithium and oil and gas exploration company, said it acquired a 10% interest in the multi-trillion cubic feet Sasanof gas exploration prospect, offshore Western Australia.
Ireland-based Clontarf acquired the prospect through a 10% purchase of Western Gas (519 P) Pty Ltd, which owns the prospect, for £480,000 in cash and shares.
"There has rarely been a better opportunity to explore large potential gas prospects in a safe jurisdiction,” said chairman David Horgan. "International gas prices have soared since late 2021 - especially in Europe and Asia."
“Investment in intermittent renewables generation requires back-up from reliable generators, of which gas-fired turbines are the most flexible and efficient.”
The prospect covers an area of up to 400 km2 and is estimated by independent energy consulting group, ERCE, to contain a P50 prospective resource of 7.2 trillion cubic feet of gas and 176 million barrels of condensate.
Clontarf will pay about US$4mln in cash and issue 100mln shares at 25p each. Upon the event of a discovery at the Sasanof-1 well, it will issue a further 150mln shares for a maximum value of £8.7mln, representing 80% of the company’s value as of May 6.
Operator Western Gas plans to start drilling in May/June and London-listed Clontarf will provide US$4mln of the estimated total cost of about US$20mln. Should the costs overrun, it will provide 20% of a further US$5mln investment, with any further costs paid on a pro-rata basis.
Clontarf will fund the acquisition through the company’s existing cash balance, supported by a £3.5mln fundraise completed in April.