Mineral Resources (ASX:MIN) has expanded its partnership with Gina Rinehart’s Hancock Prospecting into the energy space via a $1.13 billion oil and gas exploration deal.
Both companies have executed a binding sale and purchase agreement for Mineral Resources to sell two exploration permits in the Perth Basin of Western Australia. The companies will also enter into two joint venture agreements over the remaining onshore Perth Basin and Carnarvon Basin exploration acreage.
Hancock will pay up to $1.13 billion to Mineral Resources, with an upfront cash consideration of $804 million, which is payable upon completion and subject to limited conditions precedent, including ministerial consents.
The transaction is expected to be completed by the end of this year.
Mineral Resources, which has a market capitalisation of $7.27 billion, notes that Hancock will pay an additional purchase price adjustment of $327 million — subject to meeting certain resource thresholds and classifications for the Moriary Deep prospect and Lockyer Gas and Erregulla Oil discoveries.
Chief Executive of Energy Darren Hardy says both companies have a long history built on a “strong” relationship.
“I’m excited that we are again deepening our ties, this time in energy,” he says.
“This transaction maximises the value of our exploration success and again showcases our ability to unlock significant capital from MinRes’ portfolio of assets.
“The new exploration joint ventures with Hancock in the Perth and Carnarvon basins immediately derisk and accelerate our future exploration programs across this highly prospective onshore petroleum acreage.”
A definition drilling program related to the purchase price adjustment for the Moriary Deep prospect and the Lockyer Gas discovery is expected to be completed during this financial year, with drilling at the Moriary-2 well to begin in November 2024.
Mineral Resources will retain a 50% interest in the exploration joint venture assets and remain as operator, while receiving initial funding for the high-priority work program planned at the Carnarvon Basin.
If a commercial discovery is made and a joint decision is agreed upon, Hancock will fund all of the post-financial investment decision development costs for the joint venture assets.
As a result, Mineral Resources’ interest will be carried at a commercial interest rate on reasonable terms.
Mineral Resources is a diversified resources company with operations in lithium, iron ore, energy, and mining services across Western Australia.
Hancock Prospecting is a private Australian-owned mining and agricultural business.
Write to Aaliyah Rogan at Mining.com.au
Images: Mineral Resources
