By Ben Sharples
May 29 (Bloomberg) -- Korea Gas Corp., the world’s largest buyer of liquefied natural gas, agreed to acquire 10 percent of Australian coal-seam gas explorer Blue Energy Ltd., with the option of taking stakes in Queensland drilling permits.
Korea Gas agreed to buy shares at 20 Australian cents apiece, Blue Energy said in a statement to the Australian stock exchange today, 7 percent below the last closing price. Blue Energy jumped as much as 14 percent in Sydney trading, valuing it at about A$110 million ($87 million).
Chairman Peter Cockcroft said in November the Brisbane- based company would form alliances with partners as it seeks to confirm more than 1 trillion cubic feet of reserves within five years. BG Group Plc, Royal Dutch Shell Plc and ConocoPhillips are among companies that last year invested more than A$22 billion ($17.3 billion) in Queensland aiming to turn coal seam gas in Queensland into LNG.
“Blue Energy views Korea Gas as a key long-term strategic partner,” Cockcroft said in the statement. Under the heads of agreement the companies signed, Korea Gas has the option to share in Blue Energy’s permits in the Galilee Basin and the Northern Bowen Basin and can nominate one director to Blue Energy’s board.
Korea Gas has agreed to buy a stake of 10 percent based on Blue Energy’s expanded issued capital after a share sale to existing investors that closes June 3.
Blue Energy, which has more than doubled in the past six months, gained as much as 3 Australian cents to 24.5 cents and was at 23.5 cents at 12:19 p.m. in Sydney. The advance compared with an increase of as much as 1.2 percent in the exchange’s benchmark energy index. Korea Gas shares fell 2.5 percent to 45,550 won at 10:20 a.m. in Seoul.
Funds raised from Korea Gas and the share sale will be used to help certify the Australian company’s gas reserves in the second quarter of 2010, Blue Energy said.
To contact the reporter on this story: Ben Sharples in Melbourne bsharples@bloomberg.net
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