Shell Offers to Buy Cove Energy at 73% Premium (RDS-A, APC)
Royal Dutch Shell plc (NYSE: RDS-A) has reportedly offered $1.58 billion to acquire London-based energy company Cove Energy PLC. The offer is a 73% premium to Cove’s average closing price over the past five days. Cove’s main asset is an…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Royal Dutch Shell plc (NYSE: RDS-A) has reportedly offered $1.58 billion to acquire London-based energy company Cove Energy PLC. The offer is a 73% premium to Cove’s average closing price over the past five days.
Cove’s main asset is an 8.5% stake in a natural gas field offshore of Mozambique in East Africa that is 35.6%-owned and operated by Anadarko Petroleum Corp. (NYSE: APC). The field is believed to hold up to 30 trillion cubic feet of natural gas. The Wall Street Journal cites an estimate that Shell is paying about $4.10/thousand cubic feet of gas for Cove.
That may sound like a lot when compared with US natural gas prices of around $2.50/thousand cubic feet. But in Asia, the likely target buyer for the gas, natural gas currently costs around $16/thousand cubic feet.
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.