OVERSEAS enthusiasm for Australia's coal seam methane sector has seen two CSM two mid-caps' share prices surge this week.
QGC's Berwyndale-16 CSM well
After falling last week, shares in takeover target Queensland Gas Company swung back up 11.6% this week to close at $1.54 after United States investment firm TCW entered the scene with an $812 million ($1.51 per share) takeover offer.
This caps off a rollercoaster ride of a fortnight for QGC, whose share price tumbled to $1.38 last week on news that Santos was abandoning its own takeover plans.
But QGC this morning rejected TCW's advances, saying it continues to support a proposal from AGL Energy to take a 27.5% stake in the company through a share placement of $1.44 per share.
Meanwhile, a major partnership with a Swedish energy company has helped push Arrow Energy's share price through the roof to $1.32 – a 14.3% gain for the week, leaving Arrow up 9.6% for February.
Arrow, which has a market capitalisation of about $606 million, announced this week it had signed a letter of intent with EIG Energy Infrastructure to fast-track the development of several of its Queensland CSM assets.
The farm-in would see EIG – a partner in Arrow's Indian CSM projects – inject about $225 million into exploration, appraisal and development work in return for a 50% stake in a third of Arrow's acreage.
But it was a different story for junior explorer Molopo Australia, whose share price copped a beating upon the release of disappointing financial results.
The company posted a loss of $1.5 million for the six months to December 31, 2006 – down 20% on the previous corresponding period – which it blamed on natural field decline from its Queensland CSM production.
But while shares in Molopo plummeted 20% for the week to close at 8.8c, they were still up about 33.3% for the month.
Meanwhile, luckless frontier CSM explorer Purus Energy also had a big week, but reasons for its success were harder to find.
Despite not making any announcements since January 31, PUR climbed 15.4% to close at 7.5c.
Two months ago, the company announced it was exiting exploration, following a disappointing campaign in the Otway Basin, to merge with a software provider as part of its plan to evaluate new business opportunities.
MPO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
