Beach Petroleum Ltd. (BPT.AU) Friday said that it has agreed to sell its 40% share of the Tipton West coal seam gas project in Queensland state to Arrow Energy Ltd. (AOE.AU) for up to A$400 million.

Arrow, which already owns 42% of Tipton West, will pay Beach A$260 million cash and A$70 million in Arrow shares upfront.

An additional A$40 million will be paid to Beach pending the booking of additional reserves, another A$15 million if Arrow supplies gas to any liquefied natural gas project by the end of 2016, and another A$15 million if any of those projects produces at least one million tons of LNG per annum by the end of 2017.

On completion of the deal, 12% of Tipton West will be made available under preemptive rights to Royal Dutch Shell (RDSB.LN), Arrow said.

By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957; ross.kelly@dowjones.com
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