Australian independent Senex Energy will recommend that its shareholders accept a revised takeover offer from South Korean steel producer Posco at A$960mn ($710mn), up from the previous offer of A$815mn.
Posco is offering A$4.60 per Senex share, up from the previous offer of A$4.40 per Senex share, which in turn was revised from two previous offers of A$4 per Senex share and A$4.20 per Senex share, Senex said today. Senex also intends to pay a dividend of up to A$0.05 per share, it said.
The Senex board intends to unanimously recommend that shareholders vote in favour of the proposed transaction, subject to no superior proposal and an independent expert concluding that the transaction is fair and reasonable and therefore in the best interests of shareholders, Senex said.
The offer has been made through Posco's international arm, which has upstream and agricultural interests. Senex has agreed to extend Posco International's exclusivity period to 26 November to allow it to obtain its internal approvals, Senex said. Posco has confirmed to Senex that it has completed all of its due diligence enquiries, it said.
The Posco acquisition will include Senex's planned purchase of two coal-bed methane (CBM) fields from the partners in the 9mn t/yr Australia Pacific LNG (APLNG) venture in Gladstone, Queensland.
Senex has a binding agreement with the APLNG partners to acquire for A$80mn undeveloped gas fields PL 209 and PL 445, which are located adjacent to Senex's Atlas gas project, Senex said in a separate announcement. As a result of the purchase of these two permits, Senex plans to expand Atlas to 30 PJ/yr (801mn m³/yr) by 2024 or 82 TJ/d, it said. The transaction for the two permits is expected to be completed in early 2022, Senex said.
The latest proposed expansion of Atlas, which is one of two operating gas fields that Senex owns, is in addition to the firm's announcement in August that it will expand Atlas to 18 PJ/yr (49.32 TJ/d) or 1.32mn m³/d.
The payment for the two fields from APLNG would be through an initial A$50mn and a further A$30mn payment upon receipt of the necessary approvals for the expansion of the Atlas field, Senex said. Senex has a mid-term production target of more than 60 PJ/yr or 164 TJ/d by the end of the 2024-25 fiscal year to 30 June.
The APLNG partners include Australian independent Origin Energy, ConocoPhillips and Chinese state-controlled energy firm Sinopec. Origin said last month it plans to sell a 10pc stake in APLNG for A$2.12bn ($1.65bn) to US energy investment firm EIG Global Energy Partners. This will reduce Origin's stake to 27.5pc, with it retaining its role as the upstream operator of the venture.
Senex's combined output from its two fields in the onshore Surat basin of Queensland accounted for a little more than 1pc of total onshore output in Queensland in September, according to data from the Australian Energy Regulator (AER). Despite the relatively low share, Senex remains of the largest onshore gas producers in Queensland given that the majority of Queensland's onshore gas is used as feedstock for the three LNG ventures located at Gladstone.
Posco has no upstream interests in Australia and it is unclear why it is purchasing gas-producing assets whose output is largely sold to the domestic market, with little exposure to international gas prices.
