UPDATE 1-Australia's Roc Oil offers to buy Anzon

Sun Jun 15, 2008 9:29pm EDT
 
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(Adds Nexus offer, updates shares)

SYDNEY, June 16 (Reuters) - Australian oil firm Roc Oil Ltd (ROC.AX) offered to buy Anzon Australia Ltd AZA.AX in a deal valuing Anzon at about A$612 million ($572 million), after agreeing to acquire UK-listed Anzon Energy Ltd ANZE.L (AEL).

Following completion of the all-share deal for AEL, worth around A$2.69 a share, Roc will own 52 percent of Anzon. It offered 0.792 of its own shares and 5 Australian cents in cash for the rest of Anzon, which it said was worth A$1.65 a share based on current market valuations.

Rocketing oil prices, which struck a life high of near $140 a barrel last week, combined with a shortage of labour and drilling equipment, have encouraged junior oil and gas companies to merge to boost their production profile.

Roc said the takeover would give the combined group a market capitalisation of around A$1.2 billion and production of around 14,500 barrels of oil equivalent a day from eight producing fields in Australia, China, Mauritania and the North Sea.

In May, Australian oil and gas producer Nexus Energy Ltd (NXS.AX) scrapped a proposed takeover of Anzon, worth around A$648 million, or A$1.75 a share in cash and scrip, after disappointing drilling results.

Nexus, which trumped an offer by Arc Energy Ltd ARQ.AX, had wanted to renegotiate the terms of the deal after seeing drilling results from the Basker 6 and Basker 6 ST1 wells at Anzon's Basker Manta Gummy field, but Anzon refused.

Roc said on Monday it had offered 0.792 of its shares plus A$0.05 cash per Anzon Australia share. Roc offered 1.33 Roc shares for each share in Anzon Energy, which owns 52 percent of Anzon Australia.

Roc said its offer for Anzon was dependent on the deal for AEL going through.

Shares in Anzon Australia were up 12.6 percent at A$1.47 at 0112 GMT. Anzon Energy stock last traded at 96.5 pence.

Anzon Australia said in March it had failed to find oil at the key Basker 6 development well at its A$1.2 billion, 10,000 barrel a day Basker Manta Gummy project off the coast of the southern Australian state of Victoria.

Analysts said Nexus could have taken the view that the field could be between 25-40 percent smaller than it had considered at the time of the merger.

Still, Anzon said further drilling at the Basker 6 ST1 well, which was sidetracked off Basker 6, encountered oil shows and was expected to begin output of in excess of 8,000 bpd starting from July, up from an earlier estimate of between 1,500-3,000 bpd. Arc Energy and Australian Worldwide Exploration Ltd (AWE.AX) agreed to a A$510 million merger in April. ($1=A$1.06) (Reporting by Miranda Maxwell; Editing by James Thornhill)

 

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