Thursday 21 September 2017

Cove considers second African rig

Thomas Molloy

Thomas Molloy

COVE Energy, an Anglo-Irish oil explorer focusing on East Africa, said the company and its partners may bring in a second rig to drill prospects off Mozambique and Kenya.

London-listed Cove made the announcement after it raised about £110m (€125.6m) in a share sale yesterday. The new shares will begin trading on November 23.

"The placing looks to have been well subscribed and the fact that the new shares are priced at a 4pc discount to where the explorer closed yesterday illustrates strong demand for the placing," said Dolmen Stockbroker's analyst Brian Gallagher. While most of the new money would be used to fund additional drilling in Mozambique, the company also set aside £23m for business development which may lead to further acquisitions in East Africa, the analyst added.

Cove's plans are fully funded until the middle of 2012, chief executive John Craven said yesterday. "We see an acceleration in East Africa, we see a possibility of bringing another rig in."

Cove, together with US-based Anadarko Petroleum, Japan's Mitsui, India's Videocon and Bharat Petroleum have made 'significant" gas discoveries offshore Mozambique this year.

Irish Independent

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