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.