SYDNEY: Australian Oil Company Limited (ASX: AOK) has signed binding agreements to acquire three petroleum leases and a pipeline license in Queensland’s Surat Basin, marking a strategic expansion into a region poised for increased gas demand.
The assets, located near the town of Surat, include the producing Emu Apple Oil Field, the Riverslea Oil Field, the Major Gas Field, and a pipeline connecting to the Silver Springs Gas Plant. The deal positions Australian Oil adjacent to acreage held by major operators like Santos and Shell in the Taroom Trough.
Under the agreements, vendor ADZ Energy will receive a 2% wellhead royalty on its interests starting January 1, 2029. Minority interest holder OGT Energy will receive a nominal $1, with the arrangement incentivizing Australian Oil to develop and process gas through OGT’s plant. The company will also assume related liabilities, while ADZ maintains existing environmental bonds totaling approximately $552,640.
Completion is subject to due diligence and waiver of pre-emptive rights by the sellers, with a long-stop date of June 9, 2026. Australian Oil stated it has concluded due diligence and expects the transaction to complete swiftly.
Managing Director Kane Marshall said the assets “align directly with our strategy to broaden our exploration portfolio” and offer a mix of near-term production optimization and exploration potential. The company highlighted the region’s undersupplied gas markets and proximity to infrastructure, including the proposed Brigalow Peaking Power Plant.
The acquired licenses have no mandatory work commitments. Australian Oil plans to fund development from existing capital and production from the Emu Apple field, aiming to increase output from 15 to 50 barrels of oil per day.