Thai PTTEP secures Mozambique consent on £1.2bn Cove Energy bid

30 May 2012 10:15  [Source: ICIS news]

handshakeSINGAPORE (ICIS)--PTT Exploration and Production Public Co Ltd (PTTEP) said on Wednesday that it has secured consent from Mozambique on the Thai firm’s proposed acquisition of Cove Energy, which has operations in east Africa.

PTTEP, through PTT Africa Investments Ltd, has made a £1.22bn ($1.91bn) cash offer to fully acquire Cove Energy Plc on 23 May.

“The Republic of Mozambique’s Ministry of Mineral Resources has consented in writing to the indirect change of control of Cove’s interests in Mozambique, should the offer be finalised,” PTTEP said in a statement filed on the Stock Exchange of Thailand.

Receipt of written consent from Mozambique’s Minister of Mineral Resources is among the conditions set out in PTTEP’s cash takeover offer of Cove Energy, which has an 8.5% interest in the Mozambique Rovuma Offshore Area 1 (Rovuma project), among others.

The Rovuma project is currently estimated to have a resource potential of some 12 trillion cubic feet (tcf) of gas, with plans to come to final investment decision on a liquefied natural gas (LNG) project by the third quarter of 2013, based on information available on Cove Energy’s website.

Commercialisation of a project using a minimum of 6 tcf in a single train LNG project is being evaluated.

“The Rovuma project interest represents a strong fit for PTTEP and the chain of the PTT Group in Thailand, which has strong LNG demand for the development of the country in the future,” PTTEP had said in a statement dated 23 May, when it made known the terms of its offer for Cove Energy.

PTT is a major oil and gas player in southeast Asia.

PTTEP’s offer price at 240 pence per share for Cove Energy represents an enterprise value/recoverable resources ratio of about $0.41-0.86 per thousand cubic feet based on an estimated recoverable natural gas resources of between 24 trillion-50 trillion cubic feet (tcf), according to a previous statement by PTTEP dated 24 April.

The Thai firm’s offer is a higher than the 220 pence/share bid made by Anglo-Dutch energy major Shell for Cove Energy in February.

($1 = £0.64)

By: Pearl Bantillo
+65 6780 4359

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