BANGKOK Shareholders of PTT Exploration and Production Pcl PTTE.BK gave the green light to a 98 billion baht ($3.1 billion) share sale, Thailand's biggest ever, that the country's top oil and gas explorer needs to pay for aggressive expansion plans.
The approval on Monday lifts the uncertainty over how PTTEP would fund the recently completed $2.2 billion acquisition of Cove Energy PLC and other expansion costs. The shares rose 3.53 percent to a four-week high of 161.50 baht before the announcement.
The Cove investment will enable the company to boost its reserves, part of a plan to triple its production to 900,000 barrels of oil equivalent per day by 2020.
"The long term outlook is positive thanks to the sustained demand for natural gas," said Songklod Wongchai, analyst at Finansia Syrus Securities, adding that the fund raising would be enough to fund the company's expansion.
The flagship unit of top Thai energy firm PTT Pcl (PTT.BK), which vies with big Chinese oil firms such as CNOOC Ltd (0883.HK) and Sinopec Corp (0386.HK) in securing resources, has said it aims to invest $12 billion over the next five years.
It had initially planned to offer the shares to all comers, but after a backlash said it would give priority to existing shareholders in an attempt to get backing for the fund raising.
PTTEP aims to raise the money by offering up to 650 million new shares to eligible existing shareholders, including PTT, whose names appear in the registration book as of November 12.
Some of the proceeds would repay a 950 million pound ($1.5 billion) bridging loan, while the rest would be used for other investments, the company said.
The Cove deal has given PTTEP access to massive gas finds off the coast of east Africa, where it will have to pay for its share of development.
Cove owns an 8.5 percent stake in a Mozambique license in the Rovuma offshore basin.
($1 = 30.75 Baht)
(Reporting by Khettiya Jittapong and Pisit Changplayngam; Editing by Michael Urquhart)