trading halt, page-13

1041 [Dow Jones] Queensland Gas (QGC.AU) rumored to be in talks with AGL Energy (AGK.AU) but differing opinions on nature of potential transaction. QGC and AGL both placed in trading halts citing discussions regarding a possible material transaction. When AGL took up its 27.5% stake in QGC in December 2006 it agreed not to lift its holding above 30% for two years; with that restriction about to expire some are speculating AGL could be considering a bid for the coal seam gas producer. But one analyst says AGL would not have the cash to make a bid offering a suitable premium for QGC, which has a market cap of A$2.9 billion, and the potential transaction is more likely to be a sale of AGL's stake. If the stake is up for sale a natural buyer could be BG Group (BG.LN) which missed out on Origin's (ORG.AU) coal seam gas assets. BG has previously dismissed speculation it could make a tilt for QGC. AGL and QGC declined to comment, BG not immediately available to comment. (APW)