UPDATE: Westside Takes Stake In Gas Venture For A$26.8 Million

Westside Corp. (WCL.AU) has agreed to pay A$26.8 million for Anglo Anglo American PLC's (AAL.LN) controlling stake in gas assets in Queensland state, potentially converting it into the state's second biggest pure-play coal seam gas company.

Mitsui & Co. (MITSY) has elected to keep its holding in the assets, meaning the purchase price is well below a A$55 million to A$80 million forecast range provided by Westside in December.

Westside said the acquisition, to be funded from a capital raising, equates to 28 cents per gigajoule of proven and probable coal seam gas reserves.

The company said it hasn't yet been fully informed whether its bid for Anglo American's 25.5% interest in some adjoining tenements has been successful, with the sale still subject to consideration of preemptive rights from Mitsui and Molopo Energy Ltd. (MPO.AU).

Soon after Westside's announcement, Molopo said it has elected to preempt the asset sale, meaning Molopo will lift its interest in the two adjoining permits to 67.1% and 62.9%, should Mitsu also exercise its preemptive rights, or to 75% in both permits if Mitsui doesn't elect to preempt.

Brisbane-based Westside, which already explores for CSG in several permits in Queensland's Bowen Basin, said the transaction will make it the state's second biggest listed pure-play CSG company behind Arrow Energy Ltd. (AOE.AU), despite the reduced size of the deal.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]