shell oil, page-2

Very handy.

By taking over Cove, that would make Shell one of PCL's partners in blocks L10A & L10B offshore Kenya.

Goes to show that PCL is in the right places at the right time with the larger companies moving in.

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Shell Bids $1.6 Billion for African Oil Explorer Cove Energy

Feb. 22 (Bloomberg) --

Royal Dutch Shell Plc, Europe's largest oil company, offered to buy African explorer Cove Energy Plc for 994.4 million pounds ($1.6 billion) to expand in Mozambique and Kenya.

Shell is offering 195 pence for each Cove share, a 26 percent premium to the closing price of the London-based company yesterday, according to a statement. Cove's board said separately that it expected to recommend the proposed acquisition.

Cove put itself up for sale last month after reporting one of the world's largest gas discoveries in a decade off Mozambique. Cove holds an 8.5 percent stake in the Rovuma Area 1, which holds 15 trillion to 30 trillion cubic feet of recoverable gas, enough to justify production of liquefied natural gas for Asian markets. The discovery is operated by Anadarko Petroleum Corp.

“This is a much better price than the market anticipated and will likely not see” another bidder, said Stuart Joyner, an analyst at Investec Securities in London.

Cove rose as much as 38.75 pences, or 25 percent, to 193.25 pence a share, in London trading. The shares were at 192.25 pence at 8:08 a.m. Shell gained 0.3 percent to 2,311 pence in London.

Coast of Kenya

Cove has already been working with Total SA and BG Group Plc to explore off the coast of Kenya. Last year, it joined Cairn Energy Plc to bid for exploration licenses off Lebanon.

Shell, which joined forces with Petroleo Brasileiro SA of Brazil last year to search for oil and gas off Tanzania, has been unsuccessful so far in East Africa. The Anglo-Dutch company plans to increase spending on exploration 35 percent to about $5 billion this year.

Cove has received “a lot of serious interest” from national and international oil companies, John Martin, a managing director at Standard Chartered Bank, which is advising Cove on the sale, said yesterday. Morgan Stanley is acting for Shell.

-- Editors: Stephen Cunningham, Will Kennedy

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