2nd UPDATE: AGL Won't Exercise Option To Buy BG Assets
15 Aprile 2009 - 3:17AM
Dow Jones News
AGL Energy Ltd. (AGK.AU) said Wednesday it won't exercise an
option to acquire A$1 billion worth of coal seam gas and power
generation assets in Queensland state from BG Group PLC
(BG.LN).
The move to waive the option, which was largely expected by the
market, means AGL has more cash for a potential tilt at the retail
energy assets of New South Wales state, which lawmakers want to
privatize by the end of 2009.
AGL has made no secret of its interest in the NSW power assets
and choosing not to exercise the BG option could reduce the need
for it to raise equity to participate in the auction.
It gained an option to purchase BG's Lacerta and Polaris CSG
fields and the Condamine Power Station in October after agreeing to
sell its holding in Queensland Gas Company Ltd. into BG's takeover
bid for that company. The options had a four month expiry date,
which AGL said Wednesday have lapsed.
The market didn't expect AGL to exercise the options, partly
because it didn't exercise them by Feb. 1, when an interest-free
period on the exercise price expired. Investors also know AGL is
interested in other acquisitions and has recently bought other CSG
assets.
AGL wants to acquire equity gas to hedge against expected rises
in gas prices. But late last year it bought CSG interests in NSW
including a full acquisition of Sydney Gas Ltd. after divesting
non-core assets.
Sydney-based AGL said in a statement that it is comfortable its
strategic target of securing 2,000 petajoules of equity gas can be
achieved from the recent acquisitions.
On power generation, it said its existing 400 megawatt of
despatch rights over the Yabulu and Oakey Power stations in
Queensland state, together with power station development rights,
delivered a better outcome than exercising the Condamine Power
Station option.
A spokesman for BG said QGC had no current intention to put the
CSG assets or the power station up for sale.
"QGC intends to construct, commission and operate the Condamine
power station and integrate and develop the Polaris and Lacerta
fields into QGC's coal seam gas portfolio," the spokesman said.
AGL Chief Executive Michael Fraser told Dow Jones Newswires in
February that he expected the company to receive strong support if
it needed to raise additional debt or equity to fund
acquisitions.
By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957;
ross.kelly@dowjones.com
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