Cove Announces Further Natural Gas Find Off Mozambique Coast

Cove Energy Plc (COV), the U.K. explorer that agreed to be bought by Thailand’s PTT Exploration and Production Pcl, said drilling at the Rovuma Area 1 exploration block off the coast of Mozambique led to more gas discoveries.

Anadarko Petroleum Corp. (APC)’s Atum well discovered gas in two “high quality” fans connected to the Golfinho Oligocene find, London-based Cove said in a statement today. The well is at the northern part of the Rovuma block.

That takes total discoveries in the block to 30 trillion to 60 trillion cubic feet of recoverable gas resources or three to six times the U.K.’s reserves. Cove’s 8.5 percent holding in Rovuma, its largest asset, attracted competing bids from Shell and Thailand’s PTT Exploration and Production. PTT’s offer of 240 pence ($3.73) a share was approved by Mozambique in May.

Cove advanced 1.9 percent to 267 pence by the close of London trading on speculation a new bid may trump PTT.

“The combination of the discovery being located entirely within Area 1 Rovuma Offshore block and its proximity to planned shore-based infrastructure provide significant commercial advantages to our partnership,” Cove Energy Chief Executive Officer John Craven said in the statement.

Twelve wells have been drilled in the Rovuma block, Cove said. Total upside for gas in place in the discovered reservoirs is approaching 100 trillion cubic feet.

The discoveries open the way for Mozambique to become an exporter of liquefied natural gas, shipping fuel to Asian economies including India and China. For state-controlled PTT, the purchase of Cove offers Thailand a secure source of gas.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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