EduBourseActualitésOrigin Energy rejects BG Group’s unsolicited conditional takeover bid

Origin Energy rejects BG Group’s unsolicited conditional takeover bid

Pierre Perrin-Monlouis Dernière mise à jour: 20 octobre 2021

Following consideration of BG Group plc’s (“BG”) proposed conditional off-market takeover bid, the Board of Origin Energy Limited (“Origin”) announced today that it intends to recommend that shareholders reject BG’s bid of $15.50 cash per share (less any final dividend).

Origin’s Chairman, Mr Kevin McCann AM, said today that “in rejecting BG’s original proposal at the same price on 30 May 2008, the Origin Board gave careful consideration at the time to all relevant information including information that evidenced an increasing appreciation of CSG valuation, such as:

• The receipt by Origin of a CSG reserves report highlighting a significant increase in Origin’s 2P and 3P reserves and contingent resources; and
• A new valuation benchmark set by Petronas’ partnership with Santos for Gladstone LNG.”

“Subsequent to this rejection, we have witnessed a continued strong interest in the CSG sector, including the announcement by Shell to acquire an interest in Arrow Energy’s CSG tenements, and a further 10% increase in the WTI spot price to levels above US$140 per barrel.”

“It is the Board’s belief that accelerating the monetisation of Origin’s CSG reserves through a formal process of inviting proposals from suitably qualified and experienced parties will enable Origin to test the value of its CSG assets through a competitive process. The process is progressing well with Expressions of Interest closing at 7pm tonight (Friday 4 July). The assessment of tenders and discussions will then be undertaken and it is anticipated that further information on this process will be provided to shareholders in the Target’s Statement.”

In announcing the conditional off-market takeover bid, BG made several contentions in connection with Origin’s CSG reserves, reversionary rights and relevant CSG valuation benchmarks.

Mr Grant King, CEO of Origin, said: “Notwithstanding BG’s contentions, Origin reaffirms its Proved, Probable and Possible (3P) CSG reserves at 10,122 PJ*, as disclosed to the market on May 30. Origin has a prime acreage position in Queensland in terms of both quality and quantity of CSG resources.

“The 3P reserves position has been certified by an independent expert, is consistent with the methodology used for other Queensland CSG operators, and is at a rate of increase in line with expectations at this stage of development and growth across the industry.” he stated.

With regard to any reversionary rights, these cover one third of Origin’s current 3P reserves and amount to a maximum theoretical reversion of 15 percent of current 3P reserves. The reversion test is applied across the portfolio of the tenements to which reversion relates and not on an individual tenement basis.

Mr King said: “We always state our 3P reserves position net of any anticipated impact of reversions and we believe that none of the 3P reserves are likely to revert to prior owners under current market conditions and planned developments.

“As prices increase, it is possible that reversion may be triggered. However the amount of CSG available in our tenements is a function of price and if gas prices escalate materially, further exploration and development will most likely result in our CSG reserves increasing. We would expect that this increase in reserves would offset any loss through reversion.”

Further detailed comments on reserves will be included in the Origin presentation to the market, which will be released today and lodged with the ASX.

Origin today also announces that it has acquired the 640MW gas-fired Uranquinty Power Station for an enterprise value of $700m from Babcock and Brown Power, and has committed to proceed with the 550MW Mortlake Power Station project at an expected cost of $640m.

Mr King said, “These transactions each individually represent a great opportunity for Origin and will create significant value for shareholders. Consistent with our fuel-integrated generator/ retailer strategy, they allow Origin to satisfy more of its peak demand from owned generation at a time when the market for peak electricity is tightening. They also provide flexibility to expand our domestic channel to market for gas.”

Origin shareholders are advised that a Target’s Statement will be provided in due course, containing full details and reasoning for the Board’s recommendation to reject BG’s conditional takeover bid. In the meantime, Origin shareholders should take no action and ignore all correspondence and contact from the BG Group.

Shareholders are welcome to contact our helpline on 1800 647 819 or +61 2 8256 3384.

For further information, please contact:

For Investors
Angus Guthrie
Manager Investor Relations
Ph: 02 8345 5558
Mobile: 0417 864 255

For Media
Michelle Hindson
Acting General Manager Corporate Communications and Government Relations
Ph: 02 8345 5217
Mobile: 0414 207 049

*10,122 3P reserves does not include conventional oil and gas reserves held by Origin, which at 1 July 2007 totalled a further 1,001 PJe of 2P reserves. A review of these conventional oil and gas reserves, together with an update of the CSG reserves assessment, will be completed for full year end reporting in July 2008.

Pierre Perrin-Monlouis
Pierre Perrin-Monlouis
Fondateur de Rente et Patrimoine (cabinet de gestion de patrimoine), Pierre Perrin-Monlouis est un analyste et trader pour compte propre. Il vous fait profiter de son expérience en trading grâce à ses analyses financières et décrypte pour vous les actualités des marchés. Son approche globale des marchés combine à la fois l'analyse technique et l'analyse fondamentale sur l'ensemble des marchés : crypto, forex, actions et matières premières.