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DAILY TELEGRAPH (UK): Eager suitors line up for First Calgary ( 20 Jan 05


By Christopher Hope (Filed: 20/01/2005)


Shell and Total are leading a group of eight to 10 energy companies hoping to buy First Calgary, the 1.7 billion gas company which wants to auction itself off by the end of March. Analysts said the deal would be one of the biggest oil and gas sales of the year.


First Calgary asked Lehman Brothers to review its strategic options three months ago. Sources said that an outright sale to the highest bidder is now most likely.


First Calgary's major asset is a massive natural gas field in on-shore Algeria. The field is attractive to big energy companies like Shell, Total, Statoil and Repsol because of its proximity to gas-hungry western Europe. First Calgary needs to sell because the field requires capital expenditure of $2.5 billion (1.3 billion).


The company announced this week that independent analysts DeGolyer and MacNaughton had estimated the field to be 13.5 trillion cubic feet. Sources said that figure could hit 20tcf by the time the field has been fully tested.


Its increasing size has propelled First Calgary's shares from just 2 two years ago to 10.05 last night, up 27. The Alternative Investment Market-listed company is now valued at just 100m less than FTSE-100 listed Cairn Energy. 

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