Shell offers to buy East Africa-focused Cove Energy for GBP 922.4mn.

By bne IntelliNews February 23, 2012
Royal Dutch Shell, Europes biggest oil firm, said it had offered to buy East Africa-focused explorer Cove Energy for GBP 922.4mn (EUR 1.1bn) in a bid to gain a foothold in Mozambique and Kenya. Shell has offered 195 pence for each Cove share, a 28.5% premium to the average closing price of the London-listed company over the five business days ending on February 21, 2012. Cove put itself up for sale on January 5, 2012 after reporting one of the worlds largest gas discoveries in a decade off Mozambiques coast. East Africa is a major prospective hydrocarbon province, which has seen a significant increase in exploration activity in recent years, the Anglo Dutch oil producer said in a statement. Shell already has interests in Tanzania, and the acquisition of Cove would mark Shell's entry into exciting new hydrocarbon provinces in Kenya and Mozambique, with significant potential for new LNG from recent gas discoveries offshore Mozambique, and further complementary exploration positions in East Africa. The energy giant said it would bring the firepower and expertise to develop Cove's assets, the most significant of which is an 8.5% stake in the Rovuma liquefied natural gas (LNG) project off the Mozambique coast. Cove also has a 15% interest in five offshore blocks in Kenya and assets in southeastern Tanzania, including 20.4% of the Mnazi Bay exploration project. The deal is subject to approval by Mozabiques government.
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