Mozambican natural gas leads Royal Dutch Shell to extend the period of its offer to buy Cove Energy

25 May 2012

Royal Dutch Shell said Thursday it had extended the period of its offer to buy Cove Energy, the day after Thai company PTT Exploration & Production PCL put forward a counter-proposal of US$1.9 billion.

In a statement Royal Dutch Shell announced that it had extended the deadline of its offer to 13 June and added that the group’s board of directors “is analysing its options and a new statement will be issued if necessary.”

Cove Energy’s board, which had previously called for its shareholders to accept Shell’s offer, on Thursday got behind PTT’s offer of 240p per share, which represented a 9.1 percent premium on Shell’s offer and a 6.6 percent premium on the average share price for the five days ended Tuesday.

With this new offer PTT, which is a much smaller group than Royal Dutch Shell, plans to guarantee the future supply of its domestic market, whilst the Shell group plans to build a new centre to export natural gas.

Cove Energy’s main asset, and which is behind the tussle to acquire the company, is an 8.5 percent stake in Area 1 of Mozambique’s Rovuma Basin, where US group Anadarko Petroleum, which has the biggest stake and is the operator, announced it had discovered natural gas reserves estimated to total 50 trillion cubic feet. (macauhub)