THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: Shell Extends Bid Date For N Sea Gas Fields 2 Wks-Source: “LONDON -- Royal Dutch/Shell Group (RD, SC) has delayed its deadline to receive final bids on the Schooner and Ketch natural gas fields in the North Sea to Nov. 5, people familiar with the situation said Friday” (ShellNews.net)

DOW JONES NEWSWIRES

Posted 23 October 2004

LONDON -- Royal Dutch/Shell Group (RD, SC) has delayed its deadline to receive final bids on the Schooner and Ketch natural gas fields in the North Sea to Nov. 5, people familiar with the situation said Friday.

The original deadline was Friday, but potential investors needed more time to understand the package, which also includes minority stakes in 10 smaller North Sea fields, sources added.

A source said the entire package could fetch between GBP150 million and GBP250 million, markedly lower than some bidders' initial assessment of GBP400 million.

"The fields are very complex and the risks are enormous," said a consultant familiar with the sale. "If you dig a dry well it is extremely expensive."

A spokesman for Shell confirmed the company was looking to sell its equity stake in the fields but declined further comment.

Shell and its joint venture partner Esso Exploration and Production, a subsidiary of ExxonMobil Corp. (XOM), each own 50% of Ketch. Shell holds 43.8% of Schooner and Esso 46.55%.

Though Esso is also selling its stakes, Shell operates the fields and a spokesman for ExxonMobil referred inquiries to Shell .

In January Shell shocked investors by reducing its proven global reserves by 20%, or 4 billion barrels. Since then the company has been looking to sell $15 billion in assets to expand its exploration and production program and make up for the shortfall.

Schooner and Ketch, which between them produced 85 million standard cubic feet of natural gas a day in the first half of 2004, are part of the sell-off.

Gaz de France (4774.FR) is believed to be the lead contender to buy the assets, sources said. GdF is regarded as a tough competitor since the state-owned French company is deeply committed to increasing its North Sea exposure to feed U.K. gas customers.

A U.K. analyst, who preferred not to be named, said GdF had deep government-backed pockets.

"Our previous experience with French state companies is that they are willing to pay anything since they are not disciplined buyers. Why should they be? It's not their money," he said.

Tullow Oil (TLW.DB) is also bidding and Centrica PLC (CNA.LN) is thought to be interested.

Spokesmen for both companies declined comment and repeated calls to GdF weren't returned.

-By Nina Sovich, Dow Jones Newswires; +44 (0)207-842-9353; nina.sovich@dowjones.com