Cultus switches attention to promising Taranaki oil find

By Staff Reporters

Listed oil explorer Cultus Petroleum is attempting to abandon its West Australian interests in favour of spending more money to develop a promising Taranaki oil find.

The company and its joint venture partners in the Australian prospect, Shell and Chevron, last week formally applied to the West Australian Government to surrender their permits in the unsuccessful Cornea field.

If the latest application is accepted without penalty, Cultus will avoid pouring any more exploration dollars into what proved to be a water logged hole.

An attempt to abandon the field last year was rejected and the partners were asked to drill five more wells to prove the potential structure was barren.

The company has included unfavourable results from those latest tests in its new application to abandon Cornea, and its application is therefore expected to be successful.

"This is good news for Cultus - our position in West Australia has been long, hard, wearying and very expensive, " Cultus chairman Mark Dunphy said.

"We were obviously putting good money in after bad."

The pull-out is timely for Cultus as it tries to shrug off an unwanted takeover bid from Austria's OMV Group.

The poor results from Cornea since late 1997 have been the main reason for a sharp fall in the company's share price that has allowed OMV to mount a raid.

After Cultus made the initial Cornea discovery, it brought in Shell and Chevron as partners, and through a successful $A100 million share placement attracted many Australian institutional investors to its share register.

Cultus shares soared to $4 each early last year, but with $A110 million spent on Cornea for no return, the share price had collapsed to as low as 40 cents earlier this year. The OMV bid is 78 cents a share.

The retreat from Cornea will leave Cultus with $70 million in cash and an interest in the Maari field offshore Taranaki.

The Maari prospect was discovered last year and has already been assessed as containing at least 40 million barrels of recoverable oil.

Cultus and its Maari partners, who are Shell and Todd family interests, also own permits to explore other areas near Maari.

OMV last week distributed its part A takeover statement to Cultus shareholders after a bid to stop it doing so was thrown out by a New South Wales court.

Cultus would deliver its part B response later this week, Mr Dunphy said.

However the bid is unlikely to succeed as it needs 75 per cent of the shares to go unconditional.

Sir Michael Fay and David Richwhite and associated parties hold 21 per cent and have indicated they are unlikely to accept.