Fletcher Challenge to buy stake in Petroz
New Zealand company Fletcher Challenge Energy, a unit of Fletcher Challenge Ltd., has agreed to purchase a 33.37% interest in Australian explorer-producer Petroz NL for $43.5 million (Aus.). FCE will also underwrite a Petroz 3-for-5 rights issue to raise another $53.4 million (Aus.).
MELBOURNE�New Zealand company Fletcher Challenge Energy, a unit of Fletcher Challenge Ltd., has agreed to purchase a 33.37% interest in Australian explorer-producer Petroz NL for $43.5 million (Aus.). FCE will also underwrite a Petroz 3-for-5 rights issue to raise another $53.4 million (Aus.).
The proceeds will help Petroz pay about half of its $195 million (Aus.) commitment to the development of the Bayu-Undan gas-condensate field in the Timor Gap. Petroz owns an 8.5% share in the $1.4 billion (US) liquids project, operated by Phillips Petroleum Australia, a unit of Phillips Petroleum Co. The project is expected to produce 113,000 b/d of liquids from early 2004.
Under the terms of the deal, FCE will initially take a 15% stake in Petroz for $12.8 million (Aus.). Pending shareholder and regulatory approvals, FCE will then acquire the rest of the 33.7% holding for $30.6 million (Aus.).
The New Zealand company has agreed not to lift its interest further for at least 12 months. Although the deal opens the door for a future takeover bid, Petroz says the admittance of a "big brother" gives the Australian junior a much-needed credibility boost in the big leagues.
