Tap Oil: Receives Several Enquiries About Australia Gas Block

Tap Oil Ltd. (TAP.AU) said Monday it will consider selling its 10% stake in the Zola gas discovery offshore Western Australia before any liquefied natural gas development occurs, and has already received several enquiries about its plans.

"Tap has recently received several enquiries from large overseas industry players about Tap's plans for Zola," the company said in a statement to the Australian Securities Exchange.

The Zola-1 exploration well in the WA-290-P permit area in the Carnavon Basin discovered a mean contingent resource of 378 billion cubic feet of natural gas. The block is operated by U.S. producer Apache Corp. (APA).

The entire Zola structure--located south of the giant Gorgon gas field being developed by a Chevron Corp.-led (CVX) consortium--contains a mean 2.33 trillion cubic feet of gas, according to a report by independent experts RPS Energy Services Pty Ltd.

"It is appropriate for a company of Tap's size and funding capabilities to consider monetizing an asset like Zola prior to the incurrence of the large scale LNG development costs which are likely required to bring the asset into production in a timeframe of at least five years," Tap said.

Tap, which has a market value of A$170 million, said it is "confident that it can maximise the value of Zola by monetizing the asset on attractive terms at the right time."

-By David Winning, Dow Jones Newswires; [phone]; [e-mail]