Shell Closer to Cove Acquisition. Offers USD 1.8 bln

Shell Closer to Cove Acquisition. Offers USD 1.8 bln

Shell Bidco, a subsidiary of international supermajor, Shell, has increased its Cove Energy takeover bid.

The company has placed a bid of around USD 1.8 billion which is a significant increase when compared to the initial USD 1.56 bln that Shell offered in February. Shell’s February bid was cancelled only two days after having been announced, by a bid from Thailand’s state controlled oil Company PTTEP which offered USD 1.77 bln.

Cove is listed on the Alternative Investment Market of the London Stock Exchange and its primary asset is an 8.5% interest in Mozambique Rovuma Offshore Area 1. The Rovuma Project is a world class gas discovery and is estimated to have resources of up to 30 trillion cubic feet (“TCF”) including the Black Pearl oil prospect. In addition, Cove also has a 10% stake in the Rovuma Onshore Area in Mozambique, as well as 10-25% interests across seven blocks in Kenya offshore deepwater.

Commenting on the Offer, Michael Blaha, Executive Chairman of Cove, said:

“The Board believes that the recommended cash offer from Shell Bidco provides very significant value to Cove Shareholders. The proposed transaction is in line with the company’s long term strategy, as set out in May 2009, of delivering value to shareholders through exploration and appraisal.”

Blaha added, “The Cove Directors are delighted that, in addition to this being a very attractive cash offer for shareholders, Shell represents an excellent partner for all the stakeholders in the Rovuma LNG project given its extensive project development, operating and marketing experience in the entire LNG value chain.”

He also said he was hoping that the Government of Mozambique would give its consent for Shell’s offer and added he was sure that the company “will continue to flourish under Shell’s ownership.”

However, the bidding race is not over. Other potential offerors can still announce competing offers.

Thai PTTEP has issued a statement in response to today’s bid saying that the company is aware of Shell’s firm intention to acquire Cove Energy and that it „is currently considering its options and will make a further announcement as and when appropriate.”

Furthermore, India’s Gail and ONGC could have a word of their own. Gail last month admitted it was together with ONGC contemplating joint participation in the formal sale process being run by Cove Energy Plc, and according to media reports, the Indian joint venture could go as high as 2 billion US dollars.

Offshore Energy Today Staff, April 24, 2012

 

 

 

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