Shell Bids for Cove Energy at USD $1.8 Billion

Share On Facebook

Oil giant firm Royal Dutch Shell (LSE:RDSA)(LSE:RDSB) raises its offer to acquire Cove Energy (LSE:COV) at US$1.8 billion, in what may become a bidding war to take over the newly discovered oil and gas deposits east of Africa.

The revised terms presented by Shell on Tuesday, 24th April, rivals Thailand’s PTT Exploration & Production’s offer two days after Shell declared its intention back in February.

The Directors of Cove Energy “intend to recommend unanimously” Shell’s offer.

The Stake

Cove Energy has an 8.5% interest in the Rovuma Basin Area 1 Block being operated by Anadarko, which has recently discovered a resource estimate of about 30 trillion cubic feet of natural gas offshore of Mozambique.

The company placed itself up for grabs in January, in line with the company’s investment objectives of acquiring assets in their early phase of development and mature them into marketable opportunities.

Counter Offer from PTTEP?

“PTTEP is currently considering its options and will make a further announcement as and when appropriate,” PTTEP’s official statement read in response to Shell’s announcement today.

But some analysts say that Shell will most likely win the war as the Government of Mozambique will favour the more established company to develop its resources.

“A key component of this is how the Mozambique authorities want to develop their resources and a project of this scale needs an oil major with the financial resources and the expertise of bringing world class scale projects to fruition so you need someone like a Shell,” said analyst Andrew Matharu of Westhouse Securities.

Cove Energy’s Chairman, Michael Blaha echoed this sentiment saying “Shell represents an excellent partner” in the development of the LNG project in Mozambique.

Company Spotlight

Since then, Cove Energy’s market value has increased tremendously, more than doubled since December 2011, following anticipation of a final sale agreement.

In London’s Alternative Investment Market, Cove Energy inched 4.26% more to 226 pence at 2:00 PM GMT, following the news.

References
 Company History
 PTTEP Proposed Cash Offer for Cove Energy
 Cove Energy Assets in Mozambique
 PTTEP Statement on Shell’s Cash Offer for Cove Energy

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20200406 08:26:21