Cove Energy Share Discussion Threads

[oldvic] 27/2/2012 23:31

next door neighbours

Daily Telegraph:

Market Report: Ophir firms as analysts fuel bid speculation

Ophir Energy was in demand as City analysts tipped the company to be the next independent oil explorer to receive a takeover offer from an oil major, possibly BP

8:50PM GMT 27 Feb 2012

On Monday, Royal Bank of Canada (RBC) argued that if Ophir is successful with its drilling campaign off the coast of Tanzania, it will become a highly attractive target for a larger oil producer.

Al Stanton, an analyst at RBC, said: "Experience tells us that prospect inventories and drilling schedules expand rapidly in newly established basins, especially when a company has a sizeable acreage position, as Ophir does in Tanzania."

"Experience also tells us that if a "Junior" [independent oil company] builds up a substantial resource base, "Big Oil" [such as Royal Dutch Shell] will take it out. Shell and PTTEP's [a Thai oil producer] bids for Cove Energy [which has operations in Mozambique] should reassure Ophir's shareholders," concluded Mr Stanton.

BP is understood to have held discussions with Ophir at the end of last year about a deal that would have provided the FTSE 100 oil group with its first oil assets in East Africa. The pair were talking about a "farm out or farm in" deal in East Africa. These type of deals typically allow an oil company to bring in a new partner into a certain area where it is looking for oil and gas.

However, some sources also previously speculated that BP may be interested in acquiring the whole of Ohpir, which rose 5.9 to 431.9p.





Post an article on this thread:
Your nickname: oldvic Click here to add an e-mail alert for this thread

[woodster71] 27/2/2012 12:46

i see now, thanks Plunger
W

[plunger2] 27/2/2012 12:29

Woodster....What the Form 8.3 is saying is that JPM hold roughly 18m shares now having sold off 30m shares on Friday. This means they had been holding 48m shares but decided to accept prices of 230-240 ish on Friday.
I wonder who bought those shares?
I hope they'll be back to buy mine at a slightly higher price ;) - but who knows?

JMHO

[woodster71] 27/2/2012 12:07

Hi - I have been looking at the Form 8.3 at 1145 today and it says that JP Morgan have sold circa 30m shares but only hold circa 18m shares in the first place. Can someone more knowledgeable than me explain what stick i have got the wrong end of on this.
Thanks
W

[monts12] 27/2/2012 11:43

Dolmen this am:
Cove Energy - Buy Previous Close 235p Target 250p
Last Wednesday Royal Dutch Shell announced a proposed bid for Cove Energy of 195p in cash for each outstanding share in the East African explorer. This was followed up on Friday by a second pro-posed bid by PTT Exploration of 220p sparking a potential bidding war. The interest within the assets now implies that the level of resource recovery will exceed the current guidance of the operator (Anadarko) at 15-30TCF recoverable and that bidders are willing to pay a premium per barrel to secure access to the Rovuma basin. At 220p we believe that PTT Exploration is assuming ultimately that up to 50TCF will be recovered from the block. As a result of last week's developments we rate the stock as a buy increasing our price target to 250p reflecting a higher per barrel valuation. This assumption reflects the fact that the sale process remains ongoing and therefore we do not rule out the possibility of a counter bid with the bidder willing to pay a premium for per barrel for pre emption rights on the licence. Our base case scenario is now that Royal Dutch Shell at least matches PTTEP offer with a premium or a new bidder possible.

[rus4] 27/2/2012 10:38

Morgan Stanley are buying on behalf of Shell and the highest they have paid is 2.4275
When making a bid will they have to match 2.4275 ?

[the ballcock] 27/2/2012 10:29

yes, i will run along and post no more. i'm wishing u all luck here, but at this price, this is a short.

[fraserdean] 27/2/2012 09:05

Please don't repost anything from him, he's on filter and that's fine and dandy.

[monts12] 27/2/2012 00:09

monts12 - 22 Feb'12 - 21:17 - 7338 of 7428   edit

Now is not the time to sell! Who's to say other potential bidders weren't hoovering up shares today or that a better bid will not come? Cove is playing a blinder here, establishing a minimum price they'll accept. IMO Shell are hoping to get assets on the cheap at £1.95 and there may be a feeding frenzy in the next few days/weeks with speculation pushing the share price over £2. Shell may have to offer more! Even if you don't think a better bid will come why accept less than £1.95 now AND pay brokers fees?

[risk1] 26/2/2012 22:39

a fat short lol

[the ballcock] 26/2/2012 22:34

i'm opening a fat short here tomorrow

[plunger2] 26/2/2012 22:02

Given the state of things this board is rather quiet.I suspect this is in marked contrast to several bidders/current and potential who have been closeted with their teams for the weekend.
FWIW I see two possible scenarios from here. First is that no new bidder emerges quickly - in which case Shell comes back with a 260p-ish KO bid.
Second is that a further bidder is flushed out in next day or two (obvious possibilities are CNOOC and KNOC and maybe a western IOC); if this happens I simply have no idea how far up the auction goes. It's a fabulous asset up for grabs but you could also get into egos etc very quickly. The best case that I can come up with, as regards justifying a high bid, would be £3.20. Sorry I can't make it higher!!!!!

Let's see what tomorrow brings.
JMHO DYOR

[mattoil] 26/2/2012 10:55

Cove does still technically have a part in the Tanzanian license, however, the government has approved the sale and in a few days it will be completed. Cove is completely divested from Tanzania. They will however have about 2 million shares in Wentworth Resources, which is worth about £1.8M pounds. Pre emption rights have already been used, if you follow the news, M&P opted to take their share. I think it is fair to say that the deal is done and closed.

[robs12] 26/2/2012 10:28

I have my fingers crossed for 250p, and think it's quite possible...not much in the press today though....not that that means much..

[funtimejonny] 26/2/2012 10:20

I'm a bit gutted that I sold out at 194.8. Wish I'd held on a bit now.
Agree with above comments about interest from Indian companies, as I remember
the way the Cairn Energy deal was spun out for about a year due to meddling by government of India (this was why I went for the Shell bid, and also the fact that it was recommended by the BOD). PTT bid took me completely by surprise.
I suppose it's too late now to buy back in and too risky at these levels, so
I'm going to invest my decent profits in WRL / OPHR and LOGP / XEL. Good luck to those wiser hands who held on a bit longer, and remember "It's never over till the fat lady sings"

[robs12] 26/2/2012 09:37

"Cove has nothing in Tanzania"

They do currently, but are in process of divesting it. Pre emption rights run out in a couple of days. Will be interesting to see if the recent excitement changes anything in that respect, but looks like it is pretty much done & dusted.

So the deal is not quite complete yet.

[rus4] 26/2/2012 09:25

Mattoil Cove and Tanzania
Cove's deal with Wentworth valued Cove's Interest at $39m
End of 4,95% royalty in Area 1, 2m shares in Wentworth, Contingent payment of $8.5m

[mattoil] 26/2/2012 09:00

Cove has nothing in Tanzania

[rus4] 26/2/2012 08:13

rus4 - 10 Jan'12 - 21:00 - 6802 of 7416 edit

I presume at this stage there is no connect between the market share price and the value being discussed with prospective purchasers.
The items which will effect the sale valuation are
A//
1/ Number of tcfs in the BWCL section Mozambique Area 1
2/ Estimate of tcfs in northern section of Area 1
3/ Estimate of tcfs in southern section of Area 1
4/ Estimate of tcfs onshore
5/ Calculation of value of tcf of Gas
6/ Valuation if Tanzania
7/ Valuation of Keyna
8/ Cash on Balance Sheet

B//
Valuation of premium to avail of future upside

C//
The number of interested parties
Two or Three interested parties should ensure fair value

Which side of £3 will the valuation fall ?
Posted 10th January
Where are we now ??

[plunger2] 25/2/2012 20:39

Well before we get into sums. Let's make it incredibly simple (which it probably won't be!)and pretend that no new bidders show up. So think about Shell approaching the Moz Govt looking for their blessing. Do they say "well we love you at 195p but not at 260p". Ha ha!
I think even Shell know that's out. So once they're looking for consent they really have to be prepared to go to 250+ = 260 (say). This is a massive gas province and they need to be "on side" for the future - when APC sell down a portion. They would simply have to re-bid (absent another bidder) and at a good level.
However if a new bidder emerges then I think we will have TRULY arrived in the auction room and thence "anything goes".
Stand up those investors still holding COV shares who never witnessed overpaying in contested auction!! :) ;)

JMHO DYOR