CSR SELLING DELHI TO EXXON UNIT, DROPS DELHI FLOAT

  CSR Ltd &lt;CSRA.S> and Exxon Corp &lt;XON>
  unit &lt;Esso Exploration and Production Australia Inc> said CSR
  has agreed to sell its &lt;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 &lt;Delhi Petroleum Pty Ltd>, which
  holds an average of 25 pct in the Santos Ltd &lt;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 &lt;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 &lt;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.
  

