drilling?, page-3

Chaps

Looks like a game within a game going on, ATM !!

Not sure what the 1st day of spring holds in store for u. I remember reading BigRoddy's post in March about BG sniffing around. However last week, this article came out in the press in the UK. Looks like BG may get Shelled out!!

Here's the link as well as the full article.

http://news.bbc.co.uk/2/hi/business/363192.stm
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BG shares soar amid Shell takeover talk

BG is the exploration and supply arm of British Gas

Shares in Britain's BG rose sharply on Monday as dealers speculated that oil giant Royal Dutch/Shell was sharpening its claws to take over the gas exploration and production group.

Both companies declined to comment, but BG stock had climbed 14.25p or 4% to 369.5p by 1130 GMT. Shell's shares rose 0.6% to 471p.

The Sunday Times reported that the Anglo-Dutch oil group was considering an approach to BG that could lead to an £18bn ($29bn) takeover.


BG and Royal Dutch/Shell have refused to comment on the rumours The newspaper said a takeover plan from 1996 - aborted days before it was due to be activated - had been revived.

It said Shell was keen to expand its interests in pipeline management and the prime asset for Shell from the former state-run British Gas would be the national gas-pipeline network Transco.

BG's current market valuation is around £13bn, but the Sunday Times report said Shell would have to pay a premium of some 30% to hook the company.


Industry merger wave

Shell said last week it was keeping its focus on internal restructuring irrespective of consolidation moves elsewhere in the oil industry.

HSBC Securities oil and gas analyst Steve Turner said BG, the exploration and supply arm of British Gas, would be be a good strategic fit for Shell if the deal was to go ahead.

"Shell are keen to expand into downstream gas, so BG would fit very snugly," he said.

"The main problem would be some loss of face given that they did look at it very closely when the share price was much lower in 1996. So to pay up now may be difficult for them."

The merger of BP and Amoco last year pushed Shell from its top spot as Europe's largest oil company.

And its other main rival, Exxon, also increased its size by merging with Mobil.