Ann: Trading Halt, page-12

BHP activist Elliott Management digs Sundance Energy's moves

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Elliott Management has taken a liking to a locally-listed company. Eddie Seal

• by
  
• Sarah Thompson
  
• Anthony Macdonald
  
• Joyce Moullakis

The big US hedge fund that was keen to shake up BHP mid-last year has found another object of interest Down Under.

Street Talk can reveal Paul Singer's Elliott Management has turned its attention to ASX-listed Sundance Energy and wants to helpthe Denver, Colorado headquartered company buy US shale assets.

Industry sources told this column Elliott is among parties to have recently held talks with Sundance Energy over a significant funding deal that would materially boost the company's acquisition warchest.

Funding arrangements under consideration are believed to include a strategic placement to a party such as Elliott matched by a rights issue to existing investors, to create a friendly deal for current shareholders and fit within fundraising guidelines recently outlined by management.


Sundance Energy would be expected to use proceeds for acquisitions. The company wants to back its US-based technical team to appraise, develop, produce and grow its asset portfolio.


It should be noted talks are ongoing and terms have not been agreed.

Sundance Energy already has shale assets in Texas's Eagle Ford shale, where BHP has operated since it bought Petrohawk Energy in 2011

It is unclear whether Elliott's involvement with Sundance is part of a strategy to target BHP's shale assets, which are famously up for sale at the moment. Of course it led the call for BHP to spin-off or sell its US shale assets as part of an activist program that launched to some fanfare last June.

But the talks highlight Elliott's strong desire to increase its exposure to the oil and gas sector, which has already seen oil prices recover from circa $US30 per barrel in early 2016 to $US70 per barrel in recent weeks.


With Saudi Arabia continuing to talk about an initial public offering of the famous Saudi Aramco business later this year, an increasing number of investors are betting that oil prices will remain relatively stable until the Saudis have sold at least a portion of the family farm.

Interestingly, Sundance Energy was in talks with a potential private equity suitor in mid-2016, burying the approach deep in an otherwise vanilla cleansing statement for a two-part placement arranged the month before.

Sundance Energy shares closed down 5 per cent to 9.4¢ on Tuesday.





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