Bloomberg News

Cove Energy Falls on Mozambique Tax Uncertainty: London Mover

March 02, 2012

Cove Energy Plc (COV), the U.K. explorer that put itself up for sale, fell the most in seven months after saying it will seek to clarify whether a holding in a Mozambique gas field would face a tax charge when the company is acquired.

Cove slid 8.2 percent, the most since Aug. 8, as of the market close in London, extending yesterday’s 6.6 percent drop.

The government of Mozambique said yesterday it’s assessing how much tax will be paid on the sale of Cove, whose main asset is an 8.5 percent interest in an offshore block where operator Anadarko Petroleum Corp. (APC) has found 30 trillion cubic feet of gas. Mineral Resources Minister Esperanca Bias told reporters in Maputo that the company will be advised on how much tax is owed when the deal is completed.

“The company is seeking clarity on the issue and will make further announcements when or if appropriate,” Cove said today in a statement. The sale process continues, it said.

Thailand’s PTT Exploration & Production Pcl (PTTEP) last week offered 1.1 billion pounds ($1.8 billion) for Cove, beating a 992.4 million-pound bid by Royal Dutch Shell Plc (RDSA) for the African explorer, and said it expects competition from international rivals. PTT offered to buy the company at 220 pence a share.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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