Venture Production, the Aberdeen-based oil and gas operator, saw its share price soar yesterday after British and Scottish Gas owner Centrica snapped up more than one-fifth of Venture’s shares.
Centrica paid 725p a share or almost £230million for a 22% stake in Venture, and said it was mulling a cash takeover offer for the UK and Dutch North Sea-focused company.
Venture said immediately that any subsequent takeover move from Centrica would require a much higher offer price. It said 725p a share substantially undervalued the company, its prospects and strategic UK gas resources.
The move came on the same day that Edinburgh-based west African oil and gas explorer Bowleven said it had received an approach over a possible cash offer for the firm at 150p a share, valuing it at about £130million.
The Bowleven directors said they would be likely to recommend the deal if a firm offer was made at that price, but added that there was no certainty that any offer would ultimately be made.
Venture’s shares jumped more than 26.5% or 154p to 734p following Centrica’s move while Bowleven’s shares gained almost 161% or 66p to 107p on news of the interest from an unnamed suitor, which sources believed might be US exploration and production operator Noble Energy.
On Tuesday, the Aberdeen company reported that operating profits doubled to £231.1million in 2008 from the year before after higher production volume and commodity prices boosted revenue by 38%.
With three field developments coming on stream in the second half of the year, Venture said it was well positioned going into 2009, with plenty of cash in hand and unused borrowing to advance its exploration and production programme and for possible acquisitions.
Since 1999 Venture has increased production from 200 barrels of oil equivalent per day (boepd) to 45,000boepd at the end of 2008.
Revenue has grown from £1million in 1999 to £494.9million last year.
Centrica is looking to reduce its exposure to volatile wholesale prices by acquiring more assets closer to home.
Venture’s shares gained sharply in January on speculation it had caught the eye of the Scottish Gas group, which said yesterday it was considering its options in relation to Venture, which could include a cash offer.
Venture urged its shareholders to take no action.
Broker Numis Securities said: “The premium paid reflects Centrica’s desire to gain access to a non-operated UK gas resource and lower cost of capital.”
BG Group said yesterday its takeover offer for Australian coal-seam gas company Pure Energy would close on Monday and that its bid was the only one on the table after Arrow Energy, pulled out of the running.
BG said it now held 36% of Pure Energy’s shares, while Royal Dutch Shell, which holds 11% of Pure, indicated on March 3 that it would accept the BG offer, which values Pure at up to £471million provided BG gains more than 90% of Pure’s share capital by the closure date.