Altona Energy Plc Update on Joint Venture

 
TIDMANR 
 
28 July 2016 
 
                               Altona Energy Plc 
 
                          ("Altona" or the "Company") 
 
                            Update on Joint Venture 
 
The Board of Altona (AIM: ANR) provides the following update for shareholders: 
 
Further to recent discussions with the South Australian Government the board of 
the Joint Venture company, Arckaringa Coal Chemical Joint Venture Co Pty Ltd 
("JV Company") has been informed that, as well as its existing Exploration 
Licences, it will need to obtain a Petroleum Exploration Licence ("PEL") before 
it can commence test drilling at its Arckaringa site in South Australia. This 
licence, which is governed by the Petroleum and Geothermal Energy Act (2000) 
requires companies to conform to higher levels of regulation and is considered 
necessary when extracting any type of hydrocarbon product (including extraction 
by way of Underground Coal Gasification ("UCG")). 
 
The JV Company proposes to comply with this new obligation and is reviewing the 
required procedures. However, it is understood that the three Exploration 
Licences relating to the tenements owned by Altona share a partial overlap with 
PELA604, an application for a PEL owned by Linc Energy Ltd, which entered into 
voluntary administration on 15 April 2016.  As the area covered by this PEL 
application is still valid despite Linc Energy being in administration, the JV 
Company has been informed by the South Australian Government that it may need 
to acquire this PEL it in order to commence any UCG activity on its tenement. 
The Company has made representations to the South Australian Government 
requesting assistance with the regulatory matter and will continue to liaise 
with them in this regard. 
 
The Company advises shareholders that the acquisition of the PEL may take a 
number of months although the directors are not currently in a position to 
state definitively how long the process will take. It is understood by the JV 
Company that the relevant assets of Linc Energy are to be acquired by a third 
party whose identity is unknown. The JV Company is attempting to establish the 
identity of the purchaser and may then enter into negotiations to acquire the 
right to apply for the PEL. 
 
During this period of inactivity, the Board of Altona has agreed with its joint 
venture partners, Sino-Aus Energy Group Ltd ("Sino-Aus") and Wintask Group 
Limited ("Wintask") that the Joint Venture Agreement cannot be implemented as 
contemplated.  The Joint Venture partners will discuss possible variations to 
the JV Agreement in due course to incorporate the change in timing as well as 
the following matters: 
 
  * The Joint Venture Partners have agreed not to proceed with the second 
    subscription by Sino-Aus for 100 million ordinary shares of Altona at the 
    subscription price of 0.75 pence per share (to raise GBP750,000). The parties 
    will endeavour to re-negotiate the terms and timing of this subscription as 
    and when the PEL has been granted to the JV Company; 
 
  * as the partners of the JV Company have agreed that the project should be 
    postponed until the PEL is granted, the parties have agreed the return to 
    Sino-Aus its first tranche payment of AUD$5.4 million (less what has been 
    already spent on the project). Sino-Aus will deposit the funds into 
    short-term investment instruments, allowing it to generate a return. 
    Wintask will leave its first tranche payment of AUD$0.6 million with the JV 
    Company. 
 
Finally, the reports being prepared by mining services company, Parsons 
Brinckerhoff, have been completed; these being the UCG technology report and 
the test drilling timetable relating to the proposed bankable feasibility 
study.  Therefore, once the licencing issue has been resolved, and the Joint 
Venture terms renegotiated as required, the project will be in a position to 
commence. 
 
The Company will make further announcements on all of these matters in due 
course. 
 
                                    -ends- 
 
For further information, please visit www.altonaenergy.com or contact: 
 
Altona Energy plc                                    [phone] 
Qinfu Zhang, Executive Chairman 
Nick Lyth, Non-Executive Director 
 
Leander (Financial PR)                               [phone] 
Christian Taylor- Wilkinson 
 
Northland Capital Partners Ltd (Nomad and            [phone] 
Broker) 
Matthew Johnson / Gerry Beaney (Corporate 
Finance) 
John Howes / Abigail Wayne (Corporate Broking) 
 
 
About Altona 
 
Altona is listed on the London Stock Exchange's AIM market.  Its principal 
focus is on the evaluation and development of the Company's flagship Arckaringa 
Project to exploit the significant coal resources contained in three 
exploration licences covering 2,500 sq. kms in the northern portion of the 
Permian Arckaringa Basin in South Australia.  The Project is designed to 
produce syngas products for the Australian market and export from a resource 
exceeding 7.8 billion tonnes of coal (1.3 billion tonnes JORC compliant). 
 
 
 
END 
 

(END) Dow Jones Newswires

July 28, 2016 04:13 ET (08:13 GMT)