Camden. AGL ups interest in Sydney Gas

Cashed-up AGL Energy Ltd has increased its stake in its takeover target Sydney Gas Ltd coal seam gas producer (CSG), at Camden, for the third time. Earlier, Sydney Gas agreed to AGL's all-cash $171 million off-market takeover bid. AGL, Australia's largest energy retailer, last month acquired CSG interests from Molopo Australia and AJ Lucas Group. Sydney Gas contributes something less than 4 per cent of NSW’s gas requirements. AGL has paid AJ Lucas and Milopo Australia $370 million for its reserves in the Gloucester Basin, in the Hunter Valley.

Boost for methane industry

AJ Lucas Group, at Ryde, which owns the biggest coal-seam methane drilling business in Australia, has signed a heads of agreement with Sydney Gas for two drilling rigs, its expertise and a new chief executive, Andrew Lucas, an AJ Lucas director who has resigned his executive position with the company, to develop its coal-seam assets. AJ Lucas is spending $20 million to take a 15 per cent share in Sydney Gas with the option to take its stake to 25 per cent if it meets targets for expanding the company’s reserves over the next three years.

Mr Lucas said the Hunter region had huge potential for coal-seam producers while the Sydney area was also a huge market for modern technology operations. Sydney Gas, a coal seam explorer, is drilling in the Camden area.