Page 6 - Oil&Gas-AustralAsia-2015-Issue-4
P. 6


Australian oil and gas company Titan Woodside offers to buy Oil
Energy Ltd (ASX: TTE, OTCQX: Search for $8 billion ByMarieRYAN
TTENY) (Titan or the Company) is
pleased to provide an operations & Australian major Woodside has made Oil Search said in an announcement
production report for Allen Dome and a play for Papua New Guinea focussed that its board intends to review the deal
Markham Dome fields. major Oil Search for a reported US$8 and while it would will consider the
Over a five month back-to-back drilling billion, however analysts at Bernstein proposal.
campaign, Titan has drilled a total Research predict the deal is not likely “It should be noted that Oil Search has
of four new wells across the JT Reese go ahead due to the offer being consid- a material equity position in the world
Lease of Allen Dome, Brazoria County, ered too low and opportunistic in the class PNG LNG Project and attractive,
TX and a pilot test, the Hudson #55 on current low oil economic climate. low cost, LNG development opportu-
Markham Dome, Matagorda County, The proposed deal would be one of the nities, including the PNG LNG Train 3
TX. biggest in the sector since Royal Dutch expansion and the Papua LNG Project,”
Titan and it’s institutional funding Shell PLC signed a $70 billion deal to the statement said.
partner, Gulf South Energy Partners buy the BG Group PLC in April this year. “This, combined with the company’s
2014 LP (Gulf South) are extensively Woodside’s offer comprises one share low operating cost producing assets,
reviewing geological data and have ini- for every four of Oil Search’s and reserves upside, significant discovered
tiated drillsite permitting to commence represents a 12 per cent premium to resources and extensive and high quali-
a continued drilling program starting Oil Search’s average daily share price in ty exploration acreage position provide
in September 2015 with the Gulf South September. Woodside said the proposal substantive scope for capital growth
2015 drilling fund. was consistent with its strategy of deliv- and position the Company to capitalise
Titan paid 25% of the drilling and com- ering superior shareholder returns. from a recovery in the oil price. Clearly,
pletion costs and owns a 50% Working Oil Search’s key value lies in its 29 Oil Search shareholders are entitled to
Interest in the well. § per cent stake in PNG LNG, the large an offer which adequately reflects this
US$19 billion liquefied natural gas value potential.
(LNG) project led by Exxon Mobil. Due to PNGs economic dependency on
Last month Oil Search reported a oil and gas, the country is struggling to
record half-year profit US$2.27 million, cope financially with the global slump
boosted by increased production from in oil prices. The government’s 9 per
the PNG LNG project and expects its cent share in Oil Search may pressure
output to reach 29 million barrels of oil the company to seriously consider
equivalent this year. Woodside’s offer.

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