After we hit the “send” button yesterday we saw an intriguing story in the South China Morning Post. “CNPC Exploration, the equally joint venture between China National Petroleum Corporation and its Hong Kong-listed subsidiary PetroChina, is considering bidding for Australian petroleum and gas producer Oil Search for as much as US$5 billion, sources said. Some European oil companies were also looking at the target, the sources also said.”
Sydney-based Oil Search (OSH:ASX) later told markets it was not aware of any such bid. Wink wink. Nudge nudge.
Or maybe Oil Search isn’t aware of any bid. This is why these things are called rumours. Nonetheless, the company’s shares were up as much as 18% during the day. They settled up 12% on extraordinary volume of 34 million shares, compared to average volume of around 2 million shares. Hmmn.
The whole of the industrialised world is searching for oil. It shouldn’t be surprising, then, when companies that have energy assets receive attention and bids for those assets. The bids will often be at a premium, which is good if you’re an existing shareholder.
The Daily Reckoning Australia