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Mineral Resources Ltd (ASX:MIN) has announced an optimistic assessment of potential gas resources at its Lockyer project, situated in Western Australia’s Perth Basin. This update comes as the company engages in discussions with potential partners regarding a joint venture or potential sale of the project. This ASX mining stock is actively exploring strategic options.
Mineral Resources has estimated "2C" contingent gas resources at the Lockyer project to be approximately 435 petajoules of sales gas. In addition, the project is believed to contain up to 3.3 million barrels of condensates. This substantial estimate positions Lockyer as one of the largest onshore gas discoveries in Western Australia, with the possibility of exploration upside extending to up to 1.4 trillion cubic feet of gas.
Located about 300 kilometers north of Perth, the Lockyer project has attracted interest from various potential partners. Mineral Resources has indicated that it is considering these inquiries as it explores partnership opportunities.
Despite the positive outlook, some market observers express caution regarding the estimates provided by Mineral Resources. Analysts, including MST Marquee’s energy expert, Saul Kavonic, have noted that while the company engaged an independent estimator to assess the project, the market might view the estimates with skepticism due to their non-independent nature.
Kavonic suggested that potential buyers may adopt a more conservative approach than the 435 petajoules estimate provided. He speculated that the overall valuation of the Lockyer project might fall within the $500 million to $900 million range, potentially leaning towards the lower end. Companies such as Mitsui and Beach Energy, which are involved with the Waitsia gas project, along with Gina Rinehart’s Hancock Energy, could be potential bidders.
Kavonic further noted that the Lockyer project might hold more value for Mitsui and Beach Energy, given that it could be developed using the existing Waitsia plant infrastructure rather than necessitating the construction of a new facility.
As Mineral Resources navigates these opportunities, the Lockyer project remains a focal point in the energy sector, with significant interest from industry players and the potential for substantial development.
