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Origin Is in `Detailed’ Talks on Coal-Seam Gas Assets (Update1)

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Origin Is in `Detailed’ Talks on Coal-Seam Gas Assets (Update1) 

By Angela Macdonald-Smith

Aug. 6 (Bloomberg) — Origin Energy Ltd., the Australian company seeking to fend off a A$13.8 billion ($13 billion) bid from BG Group Plc, is in “detailed discussions” with short-listed parties interested in its coal-seam gas business.

A “significant number of large and well-credentialed companies” in the global liquefied natural gas industry made proposals for the coal-seam gas assets, Chairman Kevin McCann said in a letter to shareholders sent today to the Australian stock exchange. The short-listed parties are reviewing confidential information before making final offers, he said.

Origin sought proposals for its coal-seam gas business after rejecting BG’s A$15.50-a-share offer, which it said undervalues its assets. McCann earlier today declined to comment to reporters in Sydney on a newspaper report that Royal Dutch Shell Plc and BP Plc are among companies that approached Origin over the assets.

“We will keep you informed of all important stages with the process to accelerate the development of our coal-seam gas reserves and the BG Group’s hostile, highly conditional bid,” McCann said in the letter to shareholders.

Origin rose 4 cents, or 0.3 percent, to A$16.12 in Sydney. The shares have traded above BG’s offer price since the bid was made, indicating some investors expect a higher offer.

Origin separately said its Kenyan oil and gas exploration venture won a six-month extension from the Kenyan energy minister on a deadline to commit to further exploration work in the offshore Lamu Basin. The venture now has until Jan. 21, 2009 to commit to further work in the L8 and L9 blocks, Origin said in a statement to the exchange.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at[email protected]

Last Updated: August 6, 2008 02:29 EDT

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