British oil and gas explorer, Cove Energy, has put itself up for sale, prompting some analysts to predict a price tag above $1 billion and a test of the industry’s interest in the emerging gas basins of east Africa.
Analysts said it made sense for Cove, until recently an industry minnow, to sell up after finding large gas reserves offshore Mozambique, alongside its US partner, Anadarko Petroleum.
Cove shares traded up 10.2 per cent at 124 pence, valuing the company at over $900 million. "We see this as a positive move that will reduce concerns that Cove might wait too long to monetise its Mozambique assets and have to raise further funding in mid-2012 to meet increasing capex (capital expenditure) requirements of the project," Michael Alsford, oil analyst at Citigroup, said in a research note.
Cove said in December it was inviting bids for its main asset, an 8.5 per cent stake in the Rovuma Area 1 offshore block in Mozambique and associated liquid natural gas (LNG) project, which is currently at the design stage.
- Reuters
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