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Message: Re: Oilexco buyout last week?
Would say, it's a forced sell off. But don't really know if they are near by.
| 12/07/2008 | Oilexco opens data room to potential buyers – report |
| Story | Oilexco advisers have invited prospective buyers of the Canadian listed oil group into a data room, according to a Sunday Times report. The report did not cite a source for the information but said a number of bigger oil companies have already indicated their interest to adviser Morgan Stanley, including Calgary-based Talisman Energy and Petro-Canada (NYSE: PCZ) and London-listed BG Group. Maersk, the shipping company from Denmark, is also considering making an offer, the item stated. Earlier this year Oilexco had a value in excess of USD 2.5bn but since that time has lost over 90% of its worth, the report said. It noted that Morgan Stanley was appointed several weeks ago to look for financing and added that the sale is being conducted at the same time as the continuing efforts to seek new funding. Investment bank Merrill Lynch has said it will provide backing for any transaction, the item reported. The piece went on to cite sources who believe a forced sale is the most likely scenario, or Oilexco may be compelled to sell its crown jewels, such as its Huntington field in the North Sea. |
| Source | Sunday Times |
| Value | USD 237m (Oilexco market cap) |
| Stake Value |
N/A |
| 11/28/2008 |
Oilexco likely to attract interest from buyers, but drilling and development costs may impact valuation |
| Story | Interested parties are likely to step forward should Oilexco put itself or any of its assets on the market, said sources familiar with the company. The Calgary-based oil and gas exploration and production company announced that it had retained Morgan Stanley to advise on strategic alternatives on 21 November. Oilexco recently cancelled a USD 150m convertible bond offering, and a USD 45m common equity offering. CAD 45m of the company’s debt matures in January, and CAD 105m matures in November 2009. Some industry acquirers are interested in acquiring Oilexco in its entirety, said an industry banker monitoring the situation. However, as “one of the most active drillers in the North Sea,” some of these buyers might be concerned about Oilexco’s significant commitments to further drilling, he cautioned. However a top Oilexco shareholder said he believed it was unlikely that an acquirer would pay the appropriate price for the company in its entirety. The shareholder contended that Oilexco would more likely try to maximize shareholder value by presently negotiating with lenders to deal with immediate liquidity issues, and delaying a potential sale until next year. At that point, production will be increased by around 50%, as its 100% owned Shelley Block property begins producing in early 2009, the shareholder said. Also, further delineation drilling at Oilexco’s Huntington property could hopefully be completed by then, delivering further value, he said. Oilexco operates its Huntington project, and owns a 40% stake. The company could also consider farming down some assets to reduce further capex and bring in some much needed cash, the shareholder added. While Oilexco is facing some serious liquidity issues, it may end up having limited options at its disposal, the industry banker said. Many of its properties require significant drilling and development costs, which would likely impact the price buyers are willing to pay, he said. Huntington, for example, although an attractive asset, needs to be developed, and after the significant drop in the price of oil, would probably not garner the most attractive sale price, the banker said. Oilexco’s most attractive assets are probably a number of small properties that are located around, and produced through its Balmoral facilities, he said. Perenco, a privately held company, may be interested in these assets, the banker speculated. “I think the more likely solution would be a sale of the company as a whole,” the banker said. Selling assets would also reduce Oilexco’s borrowing base, and so with significant capital commitments going forward, this could be another reason why the company may be more likely to sell itself, he said. Asked whether fellow Canadian outfits such as Nexen, Talisman Energy, and Canadian Natural Resources might be interested in Oilexco, the banker responded that although they would usually be buyers, Canadian oil and gas companies have other big commitments right now, especially with the Canadian oil sands. Talisman has been selling assets in the North Sea over the past year. The shareholder added that any buyer of Oilexco would need to have a strong financial backing, as it would need to assume about CAD 700m of debt and be able to fund “some fairly large-scale projects.” Abu Dhabi National Energy Company (TAQA) could potentially be a buyer of the company, he speculated. A Morgan Stanley spokesperson said that the strategic review is too preliminary to provide any commentary. Oilexco did not return calls seeking comment. |
| Source | mergermarket |
| Value | USD 508m (market cap of Oilexco) |
| Stake Value | 100% |
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