FMG buys into WA oil and gas

Fortescue Metals Group has announced plans to diversify beyond the iron ore sector by taking an 18 per cent stake in oil and gas explorer Oil Basins.

The investment is FMG’s first substantial foray into the upstream energy sector, and one of the most significant moves the company has made outside the iron ore business.

In a statement yesterday Oil Basins said the deal would raise $4.2 million and help support future onshore oil and gas exploration in Western Australia’s Canning Basin.

"The funds raised by the placement will support future funding requirements in the Oil Basin's Canning Basin assets and assist in further expanding its portfolio within its existing core areas of interest," the company said.

Industry interest in the Canning Basin has intensified over recent months, and Oil Basins already has a significant portfolio of shale and coal seam gas assets in northwest WA.

Earlier this year FMG also applied for a spate of copper, gold, and uranium exploration licences in South Australia.

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