Coogee, Nexus looking to sell

15/10/2008 - 22:00

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THE global financial crisis has had a big impact on two energy projects off Western Australia's northern coast, with Coogee Resources and Nexus Energy both putting out 'for sale' signs this month.

Coogee, Nexus looking to sell

THE global financial crisis has had a big impact on two energy projects off Western Australia's northern coast, with Coogee Resources and Nexus Energy both putting out 'for sale' signs this month.

The board of unlisted Coogee Resources has decided to put the entire company up for sale, after 35 per cent shareholder Babcock & Brown initiated the sale of its stake.

This follows Nexus Energy's decision to sell at least a 30 per cent stake in its Crux liquids projects, after an earlier deal to sell a 25 per cent stake fell through.

Both transactions flow from the global financial crisis, which has put the Babcock group under financial pressure and forced the cancellation of the initial Crux deal.

The ability of Coogee and Nexus to complete the sales will provide a fresh guide to the willingness of international companies to invest in Australian energy projects.

Coogee's majority shareholder and chief executive Gordon Martin said several factors came together to prompt the sale decision.

These include unsolicited interest that emerged from the Babcock sale process, cost over-runs and delays in development of its Montara project in the Timor Sea.

The company had been aiming for first production by last month, but is now expecting that to occur in May next year.

In addition, Mr Martin said the cost had risen by about $US200 million ($A285 million) and was now close to $US1 billion.

Babcock paid $US180 million for its 35 per cent stake in the company, but Mr Martin said that did not provide much of a guide to value in the current market.

"It's not a logical market, we don't know, we're not sure," Mr Martin told WA Business News.

However he maintains that, notwithstanding fluctuations in oil prices, Montara remains a "highly viable, economic and robust project".

Coogee chairman John Akehurst said investment bank Goldman Sachs JBWere - which was originally engaged by Babcock two months ago - would manage the sales process, which the company expects to complete by the end of November.

Mr Martin said the sale of Coogee Resources would have no effect on his Coogee Chemicals business, which was "running at a record level".

Meanwhile, Nexus has appointed Deutsche Bank to handle the partial sale of its 85 per cent interest in the Crux project.

The earlier deal involved selling a 25 per cent stake for $US255 million.

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