AUSTRALIA'S NEXUS ENERGY LIKELY TO DIVEST ANZON STAKE
Tuesday, September 02, 2008; Posted: 05:42 AM
PERTH, Sep 02, 2008
Oil and gas explorer Nexus Energy Ltd (ASX:NXS) says it hopes the minority cross-shareholdings between it and takeover target Azon Australia Ltd will be unwound soon.
Nexus say it wants to divest its 19.4 per cent stake in Anzon and the oil and gas producer and takeover target should divest its 10 per cent stake in Nexus.
Anzon is the subject of an all scrip A$350 million bid by ROC Oil Company Ltd.
Nexus chief executive Ian Tchacos told AAP that he would wait for ROC all-scrip bid for Anzon to succeed, likely this month, before he would decide about Nexus' stake in Anzon.
Mr Tchacos said it was likely Anzon and Nexus would part ways.
"Once we see what happens to that merger, it gives us an opportunity to approach - hopefully - ROC, if it all goes okay, and see if there is something we can do with each set of shareholders," Mr Tchacos said.
"We don't want a minority shareholding and don't want Anzon to have one in us.
"Since Anzon purchased the shares, our shares have more than doubled in value, so they'd have a pretty significant capital gains tax issue.
"Once the two companies consolidate, that tax issue goes away."
Mr Tchacos said Nexus would most likely to sell down a 10 per cent stake in its Crux liquids (condensate) project in Western Australia's Browse Basin to a cashed up international petroleum company.
Crux, which is 15 per cent held by Japan's Osaka Gas (TSE:9532), is expected to cost more than Nexus' current market capitalisation, so Nexus is seeking to reduce its financial exposure to the project.
Nearly $US400 million has been consigned to the project, which has the potential in the greater Crux area for a liquefied natural gas (LNG) project, Mr Tchacos said.
"We've had a lot of interest from the right sort of parties," he said.
"We're targeting the larger corporates with a track record in LNG."
Nexus expects to get Crux into production by the first half of 2011, but first cashflow will come from its Longtom gas project in Victoria's Gippsland Basin, which is slated to start production mid next year.
"We're close to a development decision on Longtom and feel that it has been fully appraised," Mr Tchacos said.
This project will be connected via a pipeline to Santos' Patricia Baleen onshore plant but there has been some delays with approvals and the capital cost has now blown out to about $US237 million.
Nexus aims to produce 40,000 barrels of oil equivalent per day by 2011.
Mr Tchacos said "the trick for us is not to get taken out" before this goal was achieved.
He did not rule out Nexus entering into a merger at some stage with a major oil partner.
He said the company was undertaking preliminary exploration at projects in Romania, and in the Mediterranean region with a view to accessing high-value markets outside Australia as part of its growth plans.
Nexus was also considering whether to explore in Asia.
(AAP)
AZA
anzon australia limited
