Petroliam Nasional Bhd, Malaysia's state-owned oil and
natural-gas company, boosted its cash bid for Progress Energy
Resources Corp. (PRQ.TO) to C$5.16 billion ($5.13 billion) to
counter a competing offer as producers race to secure Canadian
supplies for export, Bloomberg reported over the weekend.
Petronas, as the Kuala Lumpur-based company is known, raised its
price to C$22 a share from the C$20.45 it agreed to pay last month,
according to a statement from Progress Energy Resources, which
posted new year highs $22.94 Friday. The new offer is 90% more than
the Canadian oil and gas producer's closing price on June 27, the
day before the initial Petronas agreement was announced.
The higher price Petronas is willing to pay for the
Calgary-based company highlights the interest in gaining access to
gas reserves in Western Canada and shipping the fuel to Asia. Royal
Dutch Shell Plc (RDS.A), Exxon Mobil Corp.'s Imperial Oil Ltd. (
) and Apache Corp. (
) are among the companies that have said they're considering
exports of liquefied natural gas.
While "the price looks very high relative to how natural gas is
trading," Progress Energy Resources' holdings in British Columbia's
Montney shale-gas region give it a unique position to supply LNG
projects on the province's west coast, which is driving up the
bids, said Michael Tims, chairman of Calgary- based investment bank
Peters & Co. Ltd.
Chief Financial Officer Art MacNichol declined to identify the
other bidder, citing confidentiality agreements.
The company rejected two bids from a "multi-national oil
company" before agreeing to the Petronas takeover, according to a
July 24 regulatory filing. Progress Energy Resources' board was in
talks with the unidentified company until June 11, two weeks before
the Petronas deal was announced. The bids were rejected because
they didn't adequately value the company, according to the
Shell, a multi-national oil company, is studying the feasibility
of an export terminal in Kitimat, British Columbia, and recently
pulled out of the race to acquire East Africa-based explorer Cove
Energy Plc without providing an explanation, Sachin Shah, a merger
arbitrage strategist at Tullet Prebon Americas Corp., said in a
"We believe the third party is someone that already has a vested
interest in LNG in B.C., and Shell is probably at the top of that
interest list," Shah said in an interview.
Shell does not comment on market rumor or speculation, Bill
Tanner, a company spokesman, said in a telephone interview.