Friday 4th July 2008
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Shares of Origin, which owns 51.4% of Contact Energy, fell 0.3% to A$16.23 - above BG Group's A$15.50 cash per share offer.
Origin's directors "gave careful consideration at the time to all relevant information including information that evidenced an increasing appreciation of CSG (coal seam gas) valuation," chairman Kevin McCann said in a statement.
That included a report showing a "significant increase" in Origin's reserves, higher valuations of rival's reserves and heightened interest in the sector.
Shell Exploration Company B.V. this month signed a preliminary agreement with Arrow Energy Ltd to jointly develop projects to extract clean-burning natural gas from coal deposits in Australia, China, Indonesia, Vietnam and India.
Contact rose 1.6% to NZ$7.83 on the NZX.
BG Group, a UK oil and gas producer, planned to use its own funds and a syndicated loan from a group including Banco Santander, HSBC Bank Plc, Societe Generale and Royal Bank of Scotland.
BG Group wants access to Origin's coal seam gas reserves to supply a liquefied natural gas plant it plans to develop in northern Queensland.
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