Article by Tom Zaunmayr, courtesy of Business News.
Hancock Prospecting has completed its $1.13-billion acquisition of two Mineral Resources Perth Basin oil and gas exploration permits.
Gina Rinehart’s Hancock has already outlaid $780 million for that acquisition and will pay the balance pending resource thresholds being met by drilling campaigns at the Moriarty Deep, Lockyer Gas, and Erregulla Oil prospects.
The initial outlay from Hancock was initially expected to be $804m.
The deal first announced in October was billed as a value-accelerating move for Mineral Resources shareholders, and an opportunity to pay down debt in a similar vein to the recent $1.3bn sale of its Onslow Iron haul road.
MinRes was carrying about $4.4bn in debt as of July this year, owing mostly to development the Onslow Iron project.
Mineral Resources and Hancock Prospecting will also deepen their ties with new joint ventures to explore the Perth and Canning basin for oil and gas.
The two 50-50 joint venture vehicles will scour Mineral Resources’ remaining tenements in the two basins, with Hancock to purchase half of MinRes’ drill rig and infrastructure by March next year.
An additional $24 million would also be paid to Mineral Resources.
Mineral Resources will remain as operator of those projects and Hancock will bankroll development should a joint decision to unlock the assets be made.
The partnership adds to ties the Chris Ellison and Gina Rinehart-led companies already hold in the iron ore sector.
MinRes and Hancock subsidiaries export iron ore from Utah Point in Port Hedland and the companies are considering building a new berth at South West Creek.
