PTT Exploration and Production (PTTEP) will request that the London Stock Exchange (LSE) cancel trading in Cove Energy shares on the Alternative Investment Market after successfully acquiring a 91.3-per-cent stake in the company worth $1.9 billion (Bt59.8 billion).
“Once Cove shares are delisted, Cove will be re-registered as a private
company. PTTEP will shortly begin the process of compulsory tender for the remaining 5.68 per cent of Cove Shares from Cove shareholders who have not yet accepted the offer,” said Tevin Vongvanich, president and chief executive officer of the Thai company.
The success of the acquisition deal on Wednesday marked PTTEP’s entry to African territory after a nearly six-month battle Royal Dutch Shell for the stake in Cove Energy. Shell last month dropped out of the competition, as it did not want to raise its offer from 220 pence a share to beat PTTEP’s offer of 240 pence (Bt119).
“The offer process is declared wholly completed,” Tevin said. “PTTEP will become a partner in Rovuma Area 1 and other petroleum projects in Mozambique and Kenya with other joint-venture partners.”
Rovuma Area 1 in Mozambique is a world-class natural-gas field estimat
ed to have resources of up to 60 trillion cubic feet, along with oil prospects in the Black Pearl structure. This project is an important base for PTTEP to increase its reserves and production volumes.
The joint-venture partners for Rovuma Area 1 are PTTEP Africa Investment with 8.5 per cent, Anadarko (the operator) with 36.5 per cent, Mitsui with 20 per cent, Mozambique’s national oil company ENH with 15 per cent, and Bharat Petroleum and Videocon, each with a 10-per-cent interest.
The acquisition also includes 10 per cent of the onshore Rovuma exploration block in Mozambique and 10-25 per cent stakes in seven deepwater exploration blocks off Kenya.
“This success marks a significant step by PTTEP into the high-potential East Africa hydrocarbon region, which will be a vital LNG [liquefied natural gas] production base in the future to support increasing demand in the Asian region, including Thailand,” Tevin said.
This is the second major takeover for PTTEP, which in November 2010 acquired a 40-per-cent interest in the Kai Kos Dehseh oil-sands project in Canada for $2.28 billion.
PTTEP has said it plans to finance the Cove Energy acquisition from its existing resources and available facilities. The company in June raised $500 million from a 30-year global bond as well as Bt5 billion from a hybrid security in the Thai market.
The two major acquisitions are raising concerns among Standard & Poor’s Ratings Services and Moody’s Investors Service over the massive increase in PTTEP’s debt level.