London-listed Altona Energy has signed a new memorandum of understanding securing investment to help develop its Arckaringa coal-to-liquids project in South Australia, after terminating a previous joint venture with China National Offshore Oil Corporation, the company said late Friday.
Under the terms of the new deal with Virgin Islands-based Sino-Aus Energy Group and Altona's 29.04% shareholder Wintask Group, A$55 million ($49 million) is to be invested to fund the completion of a bankable feasibility study into the Arckaringa project. The agreement is subject to due diligence, which is expected to be completed before May 15, 2014.
"The recently announced termination of the joint venture with CNOOC-NEI has enabled the company to open negotiations in earnest with motivated third parties and the signing of the MOU represents an encouraging next step towards finding the right partner to develop the Arckaringa project," said Altona Chairman Michael Zheng.
"Completing a transaction with Sino-Aus Energy would provide Altona with a strategic partner capable of providing the support required for the completion of the BFS and beyond," he added. "I believe a future partnership between Sino-Aus Energy and Altona would have the potential to take the coal-to-liquids/coal-to-methanol project through to completion and thereby realize the world-class potential of our project in South Australia."
Altona, which is listed on the London Stock Exchange's AIM market, has been working to evaluate and develop the Arckaringa coal resources, contained in three exploration licences covering 2,500 sq km in the northern portion of the Permian Arckaringa Basin. The resource is equivalent to 7.8 billion barrels of crude oil, according to the company.
