Bow Energy Ltd. (BOW) gained 19 percent in two days in Sydney trading amid speculation the Australian coal- seam gas explorer may be an acquisition target.
Brisbane-based Bow rose 8.5 percent today to A$1.215 at the 4:10 p.m. close in Sydney, valuing the company at A$426 million ($464 million). That followed a 9.8 percent rise yesterday.
Santos Ltd. (STO), Australia?s third-biggest oil and gas producer, agreed in July to pay about A$730 million for the shares in Eastern Star Gas Ltd. (ESG) it didn?t already own. Demand for eastern Australian natural gas is expected to more than triple by 2020, Adelaide-based Santos said in a July 18 statement
?There has been intense speculation about the coal-seam-gas sector ever since Santos? bid for Eastern Star,? Michael McCarthy, Sydney-based chief market strategist at CMC Markets Asia Pacific Pty Ltd., said in an e-mail, without citing any potential acquirers. With its market valuation ?Bow Energy would seem to be an easy acquisition,? he said.
Bow isn?t aware of any information it hasn?t already disclosed to the market that may explain the gain in the shares, Andrew Barber, investor relations manager, said by phone today.
?The company remains in discussion with a number of potential off-take or joint venture partners,? he said.
One possible destination for its gas is Gladstone, Queensland state, where more than A$50 billion of liquefied natural gas projects are being built, Bow has said. ConocoPhillips and its partner Origin Energy Ltd. last week approved the first phase of an LNG venture, following rival projects approved by Santos and BG Group Plc. (BG/)
?Bow has attracted more attention since the Eastern Star transaction,? Andrew Williams, a Melbourne-based analyst at RBC Capital Markets, said by phone today. ?Bow potentially represents the largest uncommitted gas potential of scale.?
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