London Evening Standard: First Calgary plotting £1bn sale: “FIRST Calgary has appointed bankers to kick-start a £1bn sale likely to entice bids from Shell, Total and other heavyweights in the oil and gas industry.” (ShellNews.net)
18 October 2004
FIRST Calgary has appointed bankers to kick-start a £1bn sale likely to entice bids from Shell, Total and other heavyweights in the oil and gas industry.
Lehman Brothers is understood to have been brought on board by the Alternative Investment Market-listed Canadian energy group as it decides to cash in on the huge Algerian gas find that transformed its fortunes.
Shares in First Calgary have rocketed from 130p last autumn to a new high of 778p today, up 24 1/2p, on the back of a series of successful test wells following its initial discovery.
It may have as much as 20 trillion cubic feet under the ground in North Africa, equivalent to more than 3bn barrels of oil, a third more than the amount Cairn Energy says it found in India.
A source said Lehman had been instructed to begin the sale process by February. Another added: 'They need to sell the company before the market cap gets too high and out of kilter with what they have.'
The group has insisted all year it has the financial muscle and banking support to press on with the development of its Algerian discovery, Ledjmet.
But the decision to put itself on the block will come as no surprise to analysts, who claim it lacks the clout to get the gas out of the country.
All gas has to be sold through Algeria's Stateowned energy group Sonotrach and industry figures claim companies can suffer long delays in striking deals.
Rival banks pitched for the sales mandate earlier this summer.