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BG Hires Wood Mackenzie to Study Previous Australia Gas Deals

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BG Hires Wood Mackenzie to Study Previous Australia Gas Deals 

By Jason Scott

July 10 (Bloomberg) — BG Group Plc, seeking to buy Australia’s Origin Energy Ltd. in a A$13.8 billion ($13.3 billion) hostile takeover, commissioned Wood Mackenzie Consultants Ltd. to analyze similar deals for coal-seam gas reserves.

The U.K.’s third-largest oil and gas producer hired the Edinburgh-based consultancy to study Petroliam Nasional Bhd.’s $2.51 billion purchase of a share in Santos Ltd.’s planned liquefied natural gas project in May and Royal Dutch Shell Plc’s $700 million venture with Arrow Energy Ltd. last month, Wood Mackenzie said in a statement released by BG today.

BG today reiterated in a statement that its A$15.50 a share all-cash offer announced June 24 reflects the true extent of Origin’s gas reserves. Origin’s board spurned a previously agreed approach from BG, after doubling its coal-seam gas reserves. Origin said the decision by Petronas, Malaysia’s national oil company, to pay $2.51 billion for a stake in Santos‘s LNG project showed its resources were worth more.

BG took its offer direct to shareholders after Origin rejected the bid in May. Reading, England-based BG wants Origin’s coal-seam gas resources in east Australia, which may feed a proposed liquefied natural gas project supplying utilities in northern Asia.

BG’s offer values Origin 48 percent higher than when it first bid April 30. The U.K. company may have to increase its offer, Merrill Lynch & Co., Credit Suisse Group, ABN Amro Inc. and JPMorgan Chase & Co. said last week.

LNG is gas chilled to liquid form for transportation by tanker. Chinese oil companies plan to build more than 10 LNG terminals along the coast to meet a government target of doubling gas use by 2010.

Coal-seam gas, mostly comprising methane, bonds as a thin film on the surface of coal and is released when pressure is reduced, usually after water is removed.

Origin shares were trading at A$16.04, down 26 cents, at 3:09 p.m. in Sydney. They have been trading above BG’s A$15.50 offer since it was announced.

To contact the reporter on this story: Jason Scott in Perth at[email protected];

Last Updated: July 10, 2008 01:33 EDT

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