M&A

Shell suggested on Alphaville as a potential bidder for HOIL at 700p+ (breaking up the Genel deal), accounting for today's strength.

ee

Ah, I see Alphaville reporting rumours that Shell possibly looking to crash the HOIL/Genel tie up....

Interesting but would put Shell in the situation of risking p'ing off the ING given the situation over Kurd operations and being excluded from Southern licences. Then again, given the terms the ING were seeking for the South, perhaps Shell sees better terms up North as it were?

Edit - sorry ee, you're just too quick off the mark.... and no Im not going to make any jokes about that....... ;-))

Interesting but would put Shell in the situation of risking p'ing off the ING given the situation over Kurd operations and being excluded from Southern licences. Then again, given the terms the ING were seeking for the South, perhaps Shell sees better terms up North as it were?

Given the Iraqi situation, Shell taking out HOIL seems unlikely IMO.  Given that Shell have been highly active in chasing potential gas / LNG deals with the ING in Southern Iraq, it seems pretty unlikely that they would sacrifice that effort suddenly, unless the intention was to spin off the Kurd part of HOIL and focus on Uganda.

So we should have more details re Kosmos Energy at the end of the week:

  LONDON (Dow Jones)--Private equity backed Kosmos Energy is proceeding with plans to sell its stake in the large Jubilee oil field offshore Ghana despite securing $750 million in loans Tuesday to fund development, two people familiar with the matter told Dow Jones Newswires Wednesday.

  Jubilee, with resources of around 1.2 billion barrels of oil equivalent, could be the first of a number of discoveries that make the waters of Ghana and Ivory Coast a significant new oil province, say analysts.

  A large number of major international and state-owned oil and gas companies are among potential buyers of this strategic asset,and Kosmos hopes to have a shortlist of bidders for their stake in the field ready by Friday, one of the people said.

  Kosmos secured the $750 million debt facility Tuesday from a consortium of eight banks, which gives it "the financial resources necessary to fully develop the first phase of the Jubilee oil field," said W. Greg Dunlevy, Kosmos executive vice president and chief financial officer.

 

Africa Energy Intelligence are doing a free download which has some interesting reading in it covering almost anybody who is anybody currently engaged in the oil business in Africa. Worth a read to get a local perspective.

http://www.indigo-net.com/public/pdf/AEIA608GNQ.pdf

In reply to djpreston (post #111)

Kosmos apparently may now not sell: http://www.upstreamonline.com/live/article183371.ece

.....which would disappoint ONGC amongst others: http://in.reuters.com/article/companyNews/idINBOM48761620090714

...soon find out I guess.

Incidentally, this from GNPC is quite interesting on the Jubliee project: http://www.gnpcghana.com/_upload/general/gnpc%20jf%20gas%20concept_for%20potential%20partners.pdf

ee

http://in.reuters.com/article/oilRpt/idINN1750643120090717

Kosmos have delayed the deadline for bids on their Jubilee stake.

NEW YORK, July 17 (Reuters) - The bid deadline for private equity-backed Kosmos Energy's Ghanaian oil interests has been extended from Friday and another date will be announced within the next 30 days, two sources familiar with the matter said.

A potential sale of the stake, in the Jubilee Field in Ghana's deep waters, is being closely watched as the asset is one of the largest oil finds in West Africa in the past decade.

Predicted to hold 1.2 billion barrels of oil equivalent, the entire field is valued at $15 billion and analysts have said the stake could be valued at $3 billion to $5 billion.

The deadline extension gives bidders extra time to digest major developments over the past week. Kosmos Energy secured a $750 million loan facility to fund development of the discoveries this week. It also gained approval from the Ghanaian government for a phase-one plan of development for the field.

and the potential bidders (according to Reuters, anyway)

Kosmos Energy has been considering selling its stake in the large Jubilee oil field offshore Ghana for several months, sources have previously told Reuters. Other options that remain under consideration include an initial public offering, the sources said.

Bidders could include global energy players BP Plc (BP.L: Quote, Profile, Research), Shell Oil (RDSa.L: Quote, Profile, Research), Exxon Mobil Corp (XOM.N: Quote, Profile, Research) and Italy's ENI SpA (ENI.MI: Quote, Profile, Research) and China's CNOOC Ltd (0883.HK: Quote, Profile, Research)(CEO.N: Quote, Profile, Research).

Dunno why ONGC appear to have been dropped from the list.

Anyway, at least another month before there's likely tobe much in the way of news, it seems

Man Siarad

More Chinese M&A activity

http://www.marketwatch.com/story/cnooc-sinopec-shares-up-on-angola-field-stake-buy

Shares of Chinese energy majors Cnooc Ltd. and China Petroleum and Chemical Corp. (Sinopec) gained in Hong Kong trading Monday, helped by news that their joint venture will acquire a 20% stake in an Angolan oil block from a subsidiary of U.S.-based Marathon Oil Corp..........

 

..............The oil field "is a significant resource base with estimated recoverable light crude oil reserves of 1.5 billion barrels," Goldman Sachs analysts wrote in a report. "The $1.3 billion consideration compares with our valuation of $1.4 billion to $1.65 billion and Marathon's publicly disclosed offer of $1.8 billion to $2 billion."

They said the acquisition would build on Cnooc's "growing deepwater exposure" and values the recoverable reserves at $4.30 a barrel.

.

Just a snippit off the wires:

The number of mergers and acquisitions in the upstream oil and gas sector in the 2Q was double that of the 1Q, spurred by a resurgence in oil prices and a thaw in equity and credit markets, says IHS Herold. However, total deal value was flat at $28.4 billion because 1Q figures were buttressed by one large deal, the $20 billion merger of Suncor (SU) and PetroCanada (PCZ), it says. National oil companies took a 40% share of deal value, it adds. The market remains volatile and the outlook uncertain for the rest of the year, it says. (JHR)

 

 

I've been pointing out elsewhere that there remain plenty of doubts over long-term supply and noting that there are plenty in the market who remain very concerned about the outlook. For example the Indians (article from yesterday):
http://news.webindia123.com/news/articles/India/20090719/1298796.html

.....Confederation of Indian Industry (CII) today suggested that the government should take advantage of the situation and enter into long-term oil supply deals and acquire fields overseas to secure the country's energy needs in future.
Though the price of crude oil increased almost 100 per cent since February to about 70 dollar a barrel, CII said ''still there exists a window of opportunity to acquire international oil acreage and to secure long-term oil supply deals to secure India's energy future at an affordable price''.

......they have plainly been looking at the market prices of international E&Ps (including most of those in the UK) and noticed that they are discounting long-term oil prices of $60 (+/- $5-10)....whereas the long term futures price remains around $90.

It'll be interesting to see which assets the Indians try to pick off. Will the Chinese outbid them again?

ee

In reply to oilretire (post #115)

Another link to the same story: http://www.ft.com/cms/s/0/98d12c14-74c4-11de-8ad5-00144feabdc0.html

It'll be interesting to see if TOTAL, Sonangol or Exxon pre-empt the Chinese.....

ee

Suggestions in The Telegraph that the Chinese are looking at BOTH Emerald and Gulfsands:

http://www.telegraph.co.uk/finance/markets/marketreport/5872988/Talk-that-the-Chinese-are-circling-Gulfsands.html

Interesting to see it being suggested by The Telegraph that it is Sinochem again. SOCO watchers will remember that Sinochem's early interest in SOCO was advertised in The Telegraph last October.....so it would seem quite probable they have some sort of source in the corporate advisory structure being used by Sinochem?

No smoke without fire?

ee

I see that the situation with which I started this thread has now been resolved:

http://www.wabusinessnews.com.au/en-story/1/73882/Target-Energy-takeover-fizzles-out-

The low key takeover battle for Target Energy has ended with suitors Advance Energy and Odin Energy allowing the "overvalued" offer to lapse.
Both suitors had mutually agreed not to extend the takeover offer period after consideration was given to Advance's $7.5 million funding agreement.
At the end of the offer period Advance and Odin, through joint venture company Blaze Asset, had acquired a 5.83 per cent stake which it intends to keep and use as leverage to obtain a board seat.
Target managing director Laurence Roe said the company was pleased to note the takeover attempt had expired.
"Over 94% of our shareholding steadfastly supported the vision and strategy of the Target board and management - an outcome that can only be seen as an overwhelming rejection of the opportunistic bid by Blaze Asset," he said.
"Now that the Blaze bid has expired, Target Energy has returned its full attention to growing the Company and realising its full potential.

More to that than meets the eye, I suspect. Rather than the bid being "overvalued", the low takeup suggests a failure of the strategy to go hostile and pick up a decent stake.

ee

Vitol bidding for Hillsborough Resources at a 43% premium: http://www.reuters.com/article/rbssEnergyNews/idUSBNG35920220090720

...it's a coal miner though!

Dunno how big that deal is, but perhaps someone watching the Canadian market can enlighten us?

ee

Vitol Group is a group of trading companies, with its core business in energy, particularly crude oil and oil products. Other Vitol Group trading businesses include natural gas, sugar, non-ferrous metals, coal, chemicals and power.

Vitol is one of the largest Oil trading houses in the market FWIW.

Quite a small one I'd say.

http://www.marketwire.com/mw/stock.jsp?Ticker=TSX:HLB

cheers

DL

In reply to DearLeader (post #124)

Quite a small one I'd say.

http://www.marketwire.com/mw/stock.jsp?Ticker=TSX:HLB

 

Ta. Twice the size of AEX though ......;-)

cheers

ee

In reply to emptyend (post #125)

Vitol is such a complex group that I doubt you could count the people who know what all the plans are on one hand. They are scarily efficient though (the benefit fo being a Swiss private co Id guess).

Bit more flesh on the recent GPC suggestions and still persistent rumours about Wellstream .

http://www.guardian.co.uk/business/marketforceslive/2009/jul/21/morrisons-j-sainsbury

Another burst of takeover speculation emerged from the oil sector. Gulfsands Petroleum has jumped 8.25p to 185p on unconfirmed talk of a possible 275p a share offer. The company has projects in Syria and the US. Meanwhile Wellstream has added another 10p to 530p as bid speculation refuses to die down, with traders mentioning a possible price of around 600p a share.