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Shell to buy Cove Energy

February 28/2012

(forbes) -- Royal Dutch Shell is making a bet on liquefied natural gas (LNG) in East Africa, bidding to buy Cove Energy for about USD1.56 billion in cash.  The bid, expected to be approved by Coves board, would grant Shell access to the Rovuma Offshore field off Mozambiques coast, which could hold more than 30 trillion cubic feet of LNG.

Headquartered in the Netherlands, Shell is looking to strengthen its position as one of the worlds largest LNG producers, and thus offered 195 pence per share, a 73.3% premium over Coves closing price on January 4, the last day before the bid was announced, to buy the totality of shares outstanding.

Shell is looking to tap Coves 8.5% participating interest in Mozambiques Rovuma Offshore field.  While Coves board has preliminarily said it would recommend the offer to its shareholders, Shell noted it requires written consent by Mozambiques Ministry of Mineral Resources.

Author:Anna Larionova
Category:General News
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