Cove Executives Said to Start Oil Explorer for Africa
Former executives from Cove Energy Plc are starting a new oil and gas exploration firm focused on Africa after selling the London-based company for $1.9 billion to Thailand’s PTT Exploration and Production Pcl earlier this year, people familiar with the group’s plans said.
The ex-Cove executives including Chairman Michael Blaha, Chief Executive Officer John Craven, and Finance Director Michael Nolan may be involved with the new firm, to be called Discover, the people said, asking not to be identified ahead of an official announcement. Discover has secured some private financing and may pursue an eventual initial public offering in London, the people said.
East Africa, where Cove owned 8.5 percent of the Rovuma-1 exploration block in Mozambique, is attracting interest from global energy companies looking to meet surging demand for energy from fast-growing Asian economies. Anadarko Petroleum Corp. (APC) and Eni SpA (ENI) are among companies looking to tap Mozambique, home to the biggest gas find in a decade, while firms including Statoil ASA (STL) and Tullow Oil Plc seek oil off Kenya.
“East Africa is one of the biggest positive surprises in terms of exploration in the last few years,” said Laura Loppacher, a London-based oil and gas analyst at Jefferies International. “Investors in companies doing exploration in East Africa have been very well rewarded and that naturally makes people want to take another look.”
Cove’s acquisition demonstrated the potential value of energy finds in the region. Bangkok-based PTT agreed to buy Cove in July after a five-month takeover battle with Royal Dutch Shell Plc (RDSA) that more than doubled the company’s share price.
Shell has since begun discussions with Anadarko about purchasing part of its 36.5 percent stake in the same fields. The more than 100 trillion cubic feet of gas discovered so far off Tanzania and Mozambique could meet global consumption for a year.
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