Canacol Announces 2010 work programme for Capella

Canacol announced recently that it is to spend $4.1m in 2010 to appraise and develop Capella.

Sinochem's share therefore ~$37m. It seems unlikely that Emerald would have needed a placing to fund this. Especially as the pace of work in Syria has slowed down, and GPX seem to be generating lots of cash there.

Emerald Shareholders Approve the Scheme of Arrangement

The Court Meeting and EGM were held today and the required number of votes were cast to approve the takeover of Emerald Energy by Sinochem.

http://www.advfn.com/p.php?pid=nmona&article=39731673&epic=EEN

Most shareholders haev done well form this transaction, but a nagging doubt remains that the company and management could have delivered even more if they had been allowed to remain independent for another couple of years.

Since the bid was announced Canacol have indicated that the Oil in Place at Capella could be twice earlier estimates at some 2.2bn barrels in place; the testing results at Mirto have indicated at least one zone will be commercial and it does appear as though the Caballos will be commercial at Gigante-2 as well as the Tetuan.

Speculation on Hostile Bid for Gulfsands

Today, the Daily Mail has run an article speculating that Sinochem may launch an hostile bid for Gulfsands Petroleum (GPX), Emerald Energy's 50:50 partner in Block 26 in Syria.

Contrary to what the article says, Gulfsand shas 120.22m shares in issue and 129.05m shares after options are exercised. This fully diluted number of shares in issue would place a value of ~£419m on Gulfsands @ 325p/share.

One might assume GPX's Gulf of Mexico assets are worth very little and with gas prices trading near multi-year lows, the assets being cash consuming this year, and seemingly accident prone from hurricanes that does not look unreasonable.

Of course, the full bid value for Emerald Energy is 750p/share or £532m. Then if the rumoured GPX deal werer to go ahead, it would effectively put a value of ~£113m on EEN's Colombian assets (or 161p/share, compared to Jeffs RENAV of 557p/share for Colombia).

It is certainly looking like the Emerald bid was agreed at too low a price.

Gulfsands Bid Rumour Is False

According to a short entry on today's FT Alphaville "Markets Live" at around 11:40, Gulfsands have denied that it has received a bid approach from Sinochem or anyone else:

http://ftalphaville.ft.com/marketslive/

LONDON, Sept 1 (Reuters) - Gulfsands Petroleum plc : * Spokesman says no bid approach from sinochem * Spokesman says no bid approaches from other parties.

This article has since appeared on Reuters:

http://uk.reuters.com/article/idUKL172573120090901?symbol=GPX.L

LONDON, Sept 1 (Reuters) - London-listed oil explorer Gulfsands Petroleum (GPX.L) denied a report it was in takeover talks with Chinese state-owned oil company Sinochem, which had boosted Gulfsand's shares over 10 percent.

A spokesman for Gulfsands, which has a market capitalisation of around $450 million, said on Tuesday the company had not received a takeover approach from Sinochem, or other parties.

"The management have not had any kind of discussion with or proposal from Sinochem," the spokesman said.

Last month Sinochem agreed to buy Gulfsand's partner in a Syrian oil block, Emerald Energy (EMEN.L), for almost $900 million, and analysts said this had sparked takeover speculation surrounding Gulfsands.

A spokesman for Sinochem declined to comment on the report.

Gulfsands shares traded up 4.4 percent at 240 pence at 1050 GMT, after the denial, having earlier traded above 260 pence.

Speculation that Sinochem has made a bid for Gulfsands (GPX)

The article below speculates that Sinochem is in takeover talks with Gulfsands (GPX) with a takeover price of c. £400m, or c. 325p per share.

http://www.thisismoney.co.uk/markets/article.html?in_article_id=490168&in_page_id=3&position=moretopstories

And now Reuters is running the same story:

http://uk.reuters.com/article/idUKTRE57T1B220090830

As is Arabian Business News and the New York Times:

http://www.arabianbusiness.com/566310-gulfsands-in-takeover-talks-with-sinochem--report
http://www.nytimes.com/reuters/2009/08/30/business/business-uk-gulfsands-sinochem.html

Of course Sinochem has already agreed a 750p or £532m bid for Emerald Energy (EEN). The common asset between the two companies is Block 26 in Syria.

The sad thing for Emerald shareholders is that the Gulfsands deal at the rumoured price would effectively put only a ~£130m price tag on Emerald's Colombian assets. These include the very significant Capella field which has estimates as high as 1.1bn barrels in place, Gigante (where we still do not know the full results of testing the Caballos or the Tetuan) and the recently drilled Mirto prospect, where drilling results are now well overdue.

Press Speculation on Bid Approach Candidates

There has been speculation in the press as to the identity of who has approached Emerald Energy with a potential bid.

These include:

UPI suggesting one or both of Sinopec and CNOOC

http://www.upi.com/Energy_Resources/2009/07/14/Takeover-bid-for-Emerald-Energy/UPI-11291247589639/

In today's Telegraph there was a small piece where it was suggested Cazenove analysts believe it is a consortium consisting of a Chinese company and OGNC:

http://www.upi.com/Energy_Resources/2009/07/14/Takeover-bid-for-Emerald-Energy/UPI-11291247589639/


Sinopec "has form" acquiring companies with interests in both Colombia and Syria.

The first is in a consortium with OGNC acquiring Ominex in 2006. Ominex had operations in Colombia:

http://www.ibtimes.co.in/articles/20061206/ongc-sipc-oil-colombia-ominex-acquisition.htm

and this link which gives a better insight into the valuation:

http://www.financialexpress.com/news/ovlsinopec-pay-800-m-for-50-in-omimex/174353/0

Sinopec also took over Tanganyika last year which had "heavy oil" operations in Syria:

http://www.chinadaily.com.cn/bizchina/2008-09/28/content_7067375.htm

Of course Sinopec has also recently agreed a takeover of Addax which had operations over the border in the Kurdistan region of Iraq:

http://www.theglobeandmail.com/globe-investor/sinopec-agrees-to-buy-addax-for-8-billion/article1194761/