Papuan New Guinea companies Mineral Resources Development and Mineral Resources Enga are believed to be among the frontrunners to acquire Oil Search's (OSH) 20% stake in the rich but depleting Porgera mine in the PNG highlands. The two companies are understood to be offering around $120 million and to be backed by an international banking syndicate.
A decision by Oil Search is expected early next week.
MRDC is also understood to be considering selling down its 17.65% shareholding in Oil Search to fund the equity component of the possible acquisition. At current prices, MRDC's stake in Oil Search is valued at around $200 million.
A successful bid would see the MRDC/MRE partnership - which is being advised by Rothschild - hold a 25% stake in Porgera, with MRE already having 5% and Placer Dome 75%.
South African major Durban Roodepoort Deep is also speculated to be interested in the 20% stake.
Porgera has over 6 million ounces in reserves, and is currently scheduled to close in 2012.
At 1410 AEST, Oil Search Limited shares were trading 1c higher at $1.02.
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OSH Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
