MENU

BHP increases stake in Carnarvon Basin

According to a market release on Friday, mining heavyweight BHP Billiton (ASX: BHP) and micro-cap Cue Energy Resources (ASX: CUE) both announced that they have agreed to increase their interests in WA-389-P, which is an exploration permit located in the Carnarvon Basin, Western Australia.

Whilst the deals entered into by each company still rely upon regulatory approval, the companies wish to increase their stakes, recognising significant remaining hydrocarbon potential in the area. “The permit is already substantially covered by 3D seismic, which will underpin continuing exploration of the block.” Cue Energy will increase its interest to 40%, and BHP will increase its stake to 60% and, as such, will assume operatorship.

The announcement breaks the recent trend whereby BHP and other miners such as Rio Tinto (ASX: RIO) have divested in non-core and underperforming assets. BHP recently sold a 15% stake in its Jimblebar mine, raising $1.5 billion in cash.

Prior to this deal, Cue held a 35% interest, BHP held a 40% interest and Woodside Petroleum (ASX: WPL), which was the operator, held a 25% stake.

Foolish takeaway

It should be noted that Cue Energy has a market capitalisation of only $84 million. Whilst substantial findings in the area could benefit Cue significantly, it is a relatively small investment for BHP.

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.