Thailand’s PTTEP Lifts Cove Bar to USD 1.77 bln

Thailand’s PTTEP has entered into the race with Shell over Cove Energy’s shares. PTTEP’s President and CEO Anon Sirisaengtaksin revealed that the company would be willing to pay 220 pence for each Cove’s issued or to be issued share.

The proposed offer values Cove at approximately USD 1.77 billion which is higher than the USD 1.56 billion bid Shell Bidco had placed on Wednesday.

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”). 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.

Awaiting Approvals

According to PTTEP, the Firm Intention announcement is yet to be made and is subject to, and conditional upon approvals from the government of Mozambique and the recommendation from Cove’s Board.

Cove and its interest in the Rovuma Project represent a strong fit for PTTEP and the proposed acquisition of Cove is consistent with its strategy of leveraging the LNG value chain of the PTT Group. The proposed transaction would mark PTTEP’s entry into the highly prospective East Africa Hydrocarbon province and the company said it was dedicated to using its extensive experience in building a natural gas based economy for the benefit of the Republic of Mozambique and its people.

Gov’t eager for the deal

The Royal Thai Government  has also issued a statement on the matter expressing its full support for the Proposed Offer and the significant investment in Mozambique which would be the result of the successful outcome of PTTEP’s Proposed Offer.

“We are dedicated to our current associations in trade and tourism, which have proved to be mutually beneficial, and we would be delighted to have this opportunity to build on this existing relationship, particularly in the energy sector,” reads the statement by the Department of Mineral Fuel, Ministry of Energy Thailand.

Energy ministry’s statement further speaks of the opportunity to strenghten the trade links between the countries: “”PTTEP can bring its extensive experience to Mozambique to benefit the country and its people. It will also be able to provide the Republic of Mozambique with access to the Thailand LNG market, further deepening the trade links between the countries.  We are committed to assisting PTTEP in the successful outcome of the Proposed Offer, if it proceeds, and will look to use this as a platform for wider co-operation with the Republic of Mozambique.”

Offshore Energy Today Staff, February 12, 2011