Banpu ac­quires $210m US shale re­source

The Myanmar Times - - International Business -

BANPU Plc (Banpu), Thai­land’s largest coal miner and trader, has ac­quired an­other shale gas re­source in the US worth $210 mil­lion (7.01 bil­lion baht).

Chief ex­ec­u­tive Som­ruedee Chai­monkol said the com­pany has signed a pur­chase and sale agree­ment to ac­quire the op­er­a­tor po­si­tion and gas port­fo­lio in the North­east Mar­cel­lus nat­u­ral gas re­serves of Penn­syl­va­nia.

The re­serves are ad­ja­cent to the ex­ist­ing shale gas re­source in the same state, which Banpu pur­chased last year, she said.

The sale was re­ported to the Stock Ex­change of Thai­land (SET) yes­ter­day.

Ms Som­ruedee said the ac­qui­si­tion al­lows Banpu work­ing in­ter­ests of nearly 80% in 112 wells and net pro­duc­tion in­ter­est of some 100 mil­lion cu­bic feet per day.

She said the shale gas re­source has proven re­serves of 414 bil­lion cu­bic feet over 32,350 acres in the Mar­cel­lus area.

This agree­ment rep­re­sents Banpu’s fifth shale gas deal in the US, in line with the com­pany’s ex­pan­sion strat­egy to ac­quire in­ter­est in cash-gen­er­at­ing as­sets and con­tinue di­ver­si­fi­ca­tion into the gas busi­ness after fo­cus­ing on coal min­ing and power gen­er­a­tion for decades.

In April last year, Banpu ac­quired a 29.4% stake in the Chaf­fee Cor­ners Joint Ex­plo­ration Agree­ment (JEA), which runs a low-cost un­con­ven­tional op­er­a­tion in the north­east­ern sec­tion of the Mar­cel­lus area.

Banpu’s net in­ter­est in the Chaf­fee Cor­ners JEA is equiv­a­lent to proven re­serves of 156 bil­lion cu­bic feet of dry nat­u­ral gas.

Gas sale volumes last year av­er­aged 21 mil­lion cu­bic feet per day, said Ms Som­ruedee.

The gas is sold en­tirely in the US do­mes­tic mar­ket, mainly for power gen­er­a­tion, she said.

The Mar­cel­lus play is es­ti­mated to hold 85 tril­lion cu­bic feet of proven re­serves and ac­counts for one-fifth of to­tal US gas pro­duc­tion.

Last year Banpu spun off its power busi­ness un­der the name Banpu Power Plc (BPP), which was listed on the SET in Oc­to­ber 2016.

Banpu ex­pects to­tal rev­enue this year to grow 20% from $2.26 bil­lion last year thanks to ris­ing global coal prices, which are ex­pected to av­er­age $63 per tonne, up 20% from last year’s av­er­age prices of $51.53 per tonne. Banpu’s to­tal coal sale vol­ume this year will be on par with last year at 45 mil­lion tonnes.

Banpu shares closed yes­ter­day on the SET at 17.40 baht, down 10 sa­tang, in trade worth 225 mil­lion baht.

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