Anzon says pushed out of merger

By Damon Evans 

Anzon Australia’s managing director refutes claims of disappointing reserves results at the Basker Manta Gummy project off Australia as preposterous and remains miffed after Nexus Energy pushed the outfit out of a recently proposed merger.

Publicly Anzon and compatriot Nexus had a difference of opinion following the drilling of the Basker-6 well and sidetrack at the producing Basker oilfield in the Bass Strait off Victoria.

“It’s important to recognise discussions between both companies over the past months, when the value of Anzon has indisputably not decreased, but Nexus tried to pull out of the deal and gave us an offer we had to refuse,” Anzon’s managing director, Andrew Young, told Upstreamonline.

Nexus had offered A$1.75 per share or A$650 million to buy Anzon in late January, but claimed the results – including confidential data – did not provide the company with the security it was seeking and reduced its initial offer.

Young points out that four wells were drilled prior to this year’s Basker-6 probe and that they defined the north-west part of the field. Anzon saw substantial reserves upside potential in the south-eastern part of the licence.

Accordingly, two years ago the Sydney-based outfit decided to drill the Basker-6 well to appraise the south-eastern area of the field and locked in the Ocean Patriot drilling rig for the job, long before they were aware of a potential takeover.

The Basker-6 well, spudded in March, stepped a little too far outside closure of the structure, but Anzon re-directed the sidetrack 380 metres to the north-east, a relatively short distance, where they found very good sands – thicker and continuous across the field – and confirmed the south-east extension, Young said.

A new oil pool containing eight metres of net oil pay was discovered in a shallower horizon above the main zone, the full extent of which is not known yet, but means the well has substantial upside. The upper sands production tested at 4000 barrels of oil per day, while the lower sands hit 4800 bpd.

Young rebuffed widespread speculation that the field’s reserves have in fact decreased by 40% as simply unfounded with no technical justification from drilling information obtained over the past few months and the reprocessing of 3D seismic data. “It is interesting to note that Nexus did not invoke a material adverse change which was clearly not justified”, said Young.

The Basker joint venture, led by Anzon, will meet shortly to review the potential impact on reserves of the recent drilling campaign and new 3D seismic that has been calibrated with the new well intersections.

“Reserves will probably not change much, but we will release the new information hopefully by the end of May,” said Young.

“The company is in a very strong position to move forward, debt free, strong cash flow, excellent asset, we will move on and put this week behind us,” added Young.

First oil from the Basker-6 sidetrack is planned in July this year and is expected to boost output significantly from the project’s current production of about 10,000 barrels per day.

Anzon holds 40% of the Basker-Manta joint venture, with partner Beach Petroleum on a 30% stake, CIECO Exploration & Production on 20% and Sojitz Energy with the remaining 10%.

09 May 2008 00:44 GMT  | last updated: 09 May 2008 01:55 GMT