NEW YORK (The Deal) -- Cia. Espanola de Petroleos SA, a Spanish oil company owned by Abu Dhabi, said on Tuesday, Nov. 19, it had made an agreed C$2.3 billion ($2.2 billion) bid for Coastal Energy Co. (CEO.L) to expand exploration and production in Asia.
Espanola de Petroleos, known as Cepsa, said it will offer C$19 a share for Houston-headquartered Coastal, a 28% premium to the target's closing price on Monday. The offer values Coastal's equity at C$2.249 billion and includes a further C$51 million of net debt.
"Coastal's business comprises a high-quality portfolio of upstream assets located in Southeast Asia," Cepsa said. "We believe that Coastal provides a tremendous foundation for furthering our E&P strategy."
Cepsa will bid through a new holding company that will be minority owned by Strategic Resources (Global) Ltd., the private investment vehicle of Larry Low.
Cepsa's bid follows a roughly 30% decline in Coastal's share price over the past year, including a 10% fall earlier this month, after a series of results revealed lower- than-expected output.
London- and Toronto-listed Coastal owns and operates two offshore blocks in Thailand and has a 13.7% stake in Thailand's onshore Phu Horm gas field. It also has contracts with Petroliam Nasional Bhd to develop and produce oil in a cluster of offshore fields around the Malaysian Peninsula.
The target said in June that it had proven and probable reserves of about 144 million barrels of oil equivalent and claims to have identified more than 30 prospective drilling sites that could contain a further 477 million barrels of oil equivalent.