By ALEX MACDONALD
Anglo-Dutch oil major Royal Dutch Shell on Wednesday made a
proposed GBP992.4 million cash offer to buy all the shares of
UK-listed Cove Energy, marking the company's first foray into
Kenya and Mozambique, the latter of which already shows
significant potential for liquefied natural
Shell is offering 195 pence/share for all the issued and to be
issued share capital of Cove Energy through its Shell exploration and production unit.
The offer represents a 73.3% premium to the closing price of
112.5 pence per Cove share on Jan. 4, the day prior to Cove's
kick-off of a sale process.
The deal is contingent on regulatory approval, including
consent from Mozambique's minister of mineral resources
relating to Cove's 8.5% interest in the Mozambican Rovuma
Offshore Area 1 Block.
Cove's board of directors believes that the proposed offer
is sufficiently attractive that it would seek to help Shell
reach a point where it feels comfortable enough to make a
Shell is already in East Africa through its interests in
"Cove would mark Shell's entry into exciting new hydrocarbon
provinces in Kenya and Mozambique, with significant potential
for new LNG
from recent gas discoveries offshore Mozambique, and further
complementary exploration positions in East
Africa," the proposed offer document said.
In Mozambique, the Rovuma offshore basin holds large
resources of natural
gas reserves, suitable for LNG projects.
According to Cove, the Rovuma area represents the potential
for more than 30 trillion cubic feet of natural
gas and six LNG
liquefaction and purification units, known as trains.
Shell is one of the world's largest LNG producers with
equity sales volumes of 18.83 million tpy of LNG in 2011.
Adding Cove's assets to Shell's portfolio would strengthen
and further diversify Shell's existing global LNG
portfolio of production and development projects.
Early Wednesday, Cove Energy's shares traded up 24.3% or 38
pence at 192 pence. Shell's B shares traded up 0.2% or 1 pence
at 296.3 pence a share.
Dow Jones Newswires