FEG wants answers after Petroz rejection

By Phil Boeyen, ShareChat Business News Editor

Friday 6th October 2000

Rejected Petroz suitor Fletcher Energy says it is keen to see how the company plans to tackle a funding shortfall for developing the Bayu-Undan energy reserves in the Timor Sea.

Petroz shareholders yesterday voted against an FEG share placement and rights proposal, which would have raised up to A$97 million to develop the project and fund exploration programmes over the next three years.

Fletcher Energy CEO Greig Gailey says the company is disappointed with the rejection, which would have seen FEG take a cornerstone shareholding in Petroz

"This arrangement was a firm proposal to enable Petroz to take advantage of Fletcher Challenge Energy's financial and technical strengths, and to meet the forward funding demands for the successful development of Bayu Undan."

Mr Gailey says the funding requirement must be addressed if Petroz shareholders are to participate in the development of this field, and as a major shareholder in Petroz, Fletcher Challenge Energy is keenly interested in how this problem will now be resolved.

Petroz said yesterday that in the absence of the Fletcher Energy funding it would now be looking at a number of options for the best way to optimise shareholder value, including a modified form of equity raising, the sale of some or all of the company's assets, or the sale of the company as a whole.

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