Evaluate Energy’s Oil & Gas Deals of the Week featuring Vedanta Resources

Thursday, Apr 21 2011 by
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Evaluate Energys Oil  Gas Deals of the Week featuring Vedanta Resources

Main action of the week involved Vedanta Resources snapping up an 11% interest in Cairn India after Petronas offloaded their 14.9% interest in the company for US$2.1 billion. Despite launching an offer for a 51% stake in the company in August 2010, this is the first time Vedanta has laid its hands on a Cairn India share due to that particular acquisition being stalled by the need for government approval. The key asset that Vedanta wants is the 70% interest that Cairn India holds in the Rajasthan field. Originally discovered in 2004 by Cairn Energy (LON:CNE) with OOIP (original oil in place) of 1 billion barrels the field is now estimated to hold a potential 6.5 billion boe of OOIP.

The price per share paid in this deal represented a discount of 18% on the offer made to Cairn Energy, a price that ONGC were reported to have remarked as Vedanta “obviously over-paying”. It’s easy to see why ONGC may take that view when even after factoring in the value of the pipeline assets and upside from OOIP (assuming a 30% recovery factor) the price per 2P boe is still the wrong side of $30.

Meanwhile in Canada, heavily gas weighted Ember Resources were acquired by shareholders who already held a 42.2% stake in the company. The deal by Brookfield Special Situations Group and ARC Financial Corp valued the company at C$125 million. The price paid per proved & probable boe was in stark contrast to the Vedanta deal at just $5.76, which proved an example of how the composition of the reserves between oil and gas can drastically alter the view of a fair price to offer.

In Colombia Parex Resources increased its ownership from 50% to 100% in one development and three exploration blocks at a cost of $255 million. The company expects the acquisition will double its 2011 exit production and increase operating income by 50%.

Elsewhere, Norway revealed the results of the 21st Norwegian Licensing Round which involved 29 companies taking stakes in blocks. The location of the successful bidders ranged from Europe to North America with ExxonMobil, Chevron and Suncor and Japan with Idemitsu.

Top Deals of the Week

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Range Resources Limited is an exploration and production company. The Company is engaged in oil and gas exploration, and development and production in Trinidad. It holds interests in non-core oil and gas projects in Georgia and Guatemala. It holds interest in three onshore production licenses: Morne Diablo, South Quarry and Beach Marcelle, as well as interests in two exploration blocks: St Mary's and Guayaguayare. The Company's waterflood programs include Beach Marcelle South East block and Morne Diablo Expansion project. The Company's Beach Marcelle field is located on the eastern side of Trinidad, where various operators have processing facilities, and oil and gas pipelines that pass through the field. The Company is focused on the acquisition of various projects. It focuses on constructing a water pipeline to connect the gathering and injection stations at the Morne Diablo field to a water treatment facility. Range Resources (Barbados) Limited is a subsidiary of the Company. more »

LSE Price
0.025p
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a
Acquirer Target Company
Range Resources (LON:RRL LON:RRL)
1d 1w 1m 6m 1y 5y

Vedanta Resources Ltd, formerly Vedanta Resources plc, is a natural resources company, which is engaged in exploring, extracting and processing minerals, and oil and gas. The Company produces zinc, lead, silver, copper, aluminum, iron ore, oil and gas, and commercial power. Its operations are located in India, Zambia, Namibia, South Africa, Liberia, Ireland, Australia and the United Arab Emirates. Its segments include Zinc-India, Zinc-International, Oil & Gas, Iron Ore, Copper-India/Australia, Copper-Zambia, Aluminium and Power. Its geographical segments include India, China, Far East Asia, Middle East, Europe, Africa, Asia Others, UK and Others. Its Copper business includes a copper smelter, over two refineries and over two copper rod plants in India; a copper mine in Australia, and an integrated operation in Zambia consisting of approximately three mines, a leaching plant and a smelter. more »

LSE Price
832.6p
Change
0.9%
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

Cairn Energy PLC (Cairn) is a United Kingdom-based independent oil and gas exploration and development company. The Company's portfolio is focused on approximately three geographical regions, such as North West Europe, the Atlantic Margin and the Mediterranean. Cairn has exploration and appraisal assets in the Atlantic Margin, North West Europe and the Mediterranean, and core development assets in the North Sea. The Company has interests in over two the United Kingdom North Sea developments, Catcher and Kraken, and a third development, Skarfjell. Cairn holds approximately 40% interest in over three contiguous blocks offshore Senegal. The Company's subsidiaries include Capricorn Oil Limited, Cairn UK Holdings Limited, Capricorn Spain Limited, Capricorn Malta Limited, Capricorn Greenland Exploration A/S, Capricorn Exploration and Development Company Limited, Capricorn Mauritania Limited, Capricorn Senegal Limited and Capricorn Ireland Limited. more »

LSE Price
156.8p
Change
2.7%
Mkt Cap (£m)
900.2
P/E (fwd)
20.0
Yield (fwd)
n/a



  Is LON:RRL fundamentally strong or weak? Find out More »


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About EvaluateEnergy

EvaluateEnergy

Evaluate Energy is a provider of up to date and accurate oil and gas analysis for industry professionals. 


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