FEG achieves "Aussie ambition" with Petroz deal

By Phil Boeyen, ShareChat Business News Editor

Wednesday 19th July 2000

Fletcher Energy says it has realised a long-held ambition to enter the Australian oil and gas industry after signing an agreement with the Brisbane-based oil and gas explorer, Petroz N.L.

Under the agreement FEG will be spending around $80 million to acquire a 33.7 per cent shareholding in the Aussie listed company.

FEG's boss, Greig Gailey, says the investment is evidence of his company's intention to grow.

"It is entirely consistent with Fletcher Challenge Energy's stated desire to participate in major regional developments."

Mr Gailey says Petroz's growth profile complements Fletcher Energy's current production and strong cash flows.

The company also points to the exposure it will receive to a huge gas condensate field in the Timor Sea. Petroz holds an 8.25 per cent interest in the Bayu-Undan gas condensate field, which is about to enter development.

"We look forward to working with Petroz to bring this project to fruition" says Mr Gailey.

The agreement gives Fletcher Energy an option to subscribe for 29,514,890 new ordinary shares in Petroz at A$0.435 cents per share, equivalent to a 14.99 per cent stake. Subject to the approval of Petroz shareholders and the Foreign Investment Review Board, FEG will subscribe to further shares at A$0.435 per share, to bring its total holding to 100 million, or 33.7 per cent.

Petroz shareholders are due to meet to vote on the share placement in mid-September.

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