By FIONA ROTHERHAM
Fletcher Challenge Energy has sated its long-held desire to enter the Australian oil and gas industry with plans to buy a minimum 33.7 per cent shareholding in Brisbane-based Petroz NL for an estimated $80 million.
In an unrelated move, it has also sought a mining permit from Crown Minerals to develop the Mangahewa gas field in Taranaki.
Under the Petroz deal, Fletcher Energy will be given an option to acquire shares, take a further placement and underwrite a 3:5 rights issue to acquire the one-third stake in the Australian listed explorer.
Fletcher Energy's share price continued its upwards surge yesterday, closing up 9c to $7.65 on the back of the deal, while Petroz shares jumped 6.5Ac, or 20 per cent, to 38.5Ac.
The NZ exploration company's only other Australian asset, a 50 per cent stake in the South West Co-generation project at the Worsley Alumina Plant in Western Australia, is up for sale.
Fletcher Energy was one of many foreign suitors wooing the listed Petroz, whose main asset is an 8.2 per cent stake in the world-class Bayu-Undan Liquids project in the Timor Sea.
The giant field has reserves of 400 million barrels of condensate and LPG and 3.4 trillion cubic feet of natural gas and is about to enter development.
Petroz has been seeking a strategic partner for a year to help raise the $US116 million it must pay towards the $US1.4 billion cost of developing the field.
"We were looking for a company with good synergy that would add value to our shareholders and Fletchers filled the bill," said Petroz managing director Rod Brown.
The Bayu-Undan field is due to come into production in late 2003 or early 2004 and has a 20-year project life. Petroz expects its interest in the field will be redetermined closer to production to between 9 per cent and 10 per cent.
Fletcher Energy chief executive Greg Gailey said the firm would gain exposure to a world-class project which was entering its development phase.
The key points of the deal are:
* Fletcher Energy has an option to subscribe for 29,514,890 new shares, the equivalent of 14.99 per cent of issued capital, at 43.5Ac per share.
* Subject to the approval of Petroz shareholders in mid-September and the Foreign Investment Review Board, Fletcher Energy will lift its holding to 33.7 per cent at the same price.
* Fletcher Energy will underwrite a 3:5 rights issue which is hoped to raise $A53.4 million. The issue price will be 30Ac or a 20 per cent discount to the five-day weighted average share price after Petroz shareholder approval is gained.
In New Zealand, Fletcher Energy has confirmed it will bring the estimated 101 billion cubic feet Mangahewa onshore gasfield into production within the next 12 to 18 months.
Meanwhile, the High Court yesterday granted final orders approving the sale of Fletcher Paper to Norske Skog.
Fletcher Energy surges on Aust deal
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