CSR SELLING DELHI TO EXXON UNIT, DROPS DELHI FLOAT
CSR Ltd <CSRA.S> and Exxon Corp <XON>
unit <Esso Exploration and Production Australia Inc> said CSR
has agreed to sell its <Delhi Australia Fund> (DAF) to Esso for
985 mln Australian dlrs.
    The sale is effective from tomorrow, they said in a joint
statement.
    The previously announced float of part of its Delhi
interest will not now proceed, CSR said in the statement.
    Delhi Australia Fund owns <Delhi Petroleum Pty Ltd>, which
holds an average of 25 pct in the Santos Ltd <STOS.S>-led
Cooper and Eromanga Basin gas and liquids projects.
    In addition to the purchase price, CSR will share equally
in any returns due to increases in crude oil and condensate
prices over certain levels for liquids produced from Delhi's
interests in the next two years, the statement said.
    "The Esso proposal to purchase all the Delhi interest will
be more beneficial to our shareholders than proceeding with the
float," CSR chief executive Bryan Kelman said in the statement.
    Kelman said the sale of Delhi would enable CSR to focus
efforts on expanding business areas such as sugar and building
materials in which CSR has had long and successful management
experience and strong market leadership.
    With the sale, CSR will be able to expand those businesses
more aggressively and earlier, he said.
    As reported separately, soon after announcing the Delhi
sale CSR launched a takeover bid for the 68.26 pct of <Pioneer
Sugar Mills Ltd> that it does not already hold, valuing its
entire issued capital at 219.6 mln dlrs.
    After Bass Strait, the onshore Cooper and Eromanga Basin is
Australia's largest oil and gas producing area with current
gross oil production of 45,000 barrels per day (BDP), gas
liquids output of 30,000 BPD and gas sales of 480 mln cubic
feet a day, the CSR-Esso statement said.
    The purchase gives Esso, a 50/50 partner with The Broken
Hill Pty Co Ltd <BRKN.S> in the Bass Strait, its first onshore
production in Australia, they said.
    Esso's chairman Stuart McGill said he hoped Esso can assist
in maintaining the high rate of oil and gas discoveries in the
Cooper-Eromanga area.
    "These discoveries will help Australia's self-sufficiency in
oil reserves thereby offsetting in part the decline in Bass
Strait production now under way," McGill said.
    In a separately released letter to CSR shareholders, Kelman
said CSR was within days of completing plans for the float of
CSR Petroleum when it received an offer from Esso.
    He said CSR is convinced the sale was the correct decision
in view of the risks associated with the oil business.
    The price-sharing arrangement provides for CSR to share
equally with Esso in higher returns if oil prices average more
than 20 U.S. Dlrs a barrel in the next two years, he said.
    Kelman said a revaluation of CSR's investment in Delhi to
net realisable value as of today, CSR's annual balance-date,
will result in an extraordinary loss of 97 mln dlrs.
    However, revaluations and profits on sales of other assets
will significantly reduce this loss, he said.
    He also said that CSR is sufficiently encouraged by future
prospects and the opportunity to reposition the group in core
businesses to foreshadow an increase in final dividend payable
in July to 10 cents from nine to make an annual 19 cents
against 18 in 1985/86.
 REUTER
