(EnergyAsia, May 24 2012, Thursday) — Thai upstream company PTTEP has raised its all-cash offer to fully acquire UK’s Cover Energy for a total of £1.221.4 billion at 240 pence a share, trumping rival Royal Dutch Shell’s offer of 220 pence. (US$1=£0.64).
Shell might yet be drawn into a bidding war after having earlier matched PTTEP’s offer for Cove which owns sizeable natural gas reserves in Mozambique through its 8.5% stake in the offshore Rovuma Area 1 block.
Operator Anadarko Petroleum Corp said the area could hold as much as 20 trillion cubic feet (tcf) of natural gas, sufficient to justify an invesment in a liquefaction plant for export of the fuel to Asia.
“The bid from PTTEP represents significant value for shareholders and confirms the world-class nature of Cove’s east African assets,” said Cove’s CEO John Craven.
Tevin Vongvanich, PTTEP’s President and CEO, said its bid, which will be financed through a combination of cash and debt, has the unanimous support of Cove’s board of directors.
PTTEP said its offer price represents an enterprise value-to-recoverable resources ratio of US$0.41 to US$0.86 per thousand cubic feet (or US$2.48 to US$5.18 per barrel) based on the estimated recoverable reserves of between 24 and 50 tcf in the Rovuma area, including the recent Golfinho discovery.
PTTEP said the acquisition would mark its entry into the highly prospective East Africa area, presenting a strong fit for its emerging LNG business.
The proposed acquisition must be approved by the Mozambique government.