Molopo considers selling, JV for coal seam gas project

The project, about 100km north of Newcastle on a 1,050 square kilometre permit, is prospective for coal seam gas.

Molopo said several parties had shown "persistent interest" in acquiring or assisting in the development of the project in recent months.

The company has commissioned investment managers Lazard Carnegie Wylie to evaluate a range of commercialisation options including co-development opportunities and an outright sale of Molopo's 30 per cent interest.

"Given its strong gas production data, significant gas reserves with considerable upside potential, and strategic location proximate to the high priced gas market of Newcastle, the asset offers significant value potential via direct gas sales and or power generation opportunities," managing director Stephen Mitchell said.

"While the Gloucester Basin interest is clearly a high quality asset, the board felt that given the level of interest in the project, the company should formally explore the commercial options available to it."

The project contains 170 billion standard cubic feet of gas (Bscf) reserves in the `2P' category, which means it has a 50 per cent chance of being developed.