China Energy Reserve and Chemicals Group Co., Ltd (CERCG) has decided to become a bit more aggressive in its intention to takeover Australia’s AWE Limited – with its main target AWE’s 50% stake in the onshore Waitsia gas field north of Perth.

CERCG said after being in discussions with AWE for the past two months about acquiring AWE and has endeavoured to engage on a friendly and collaborative basis.

However, it said that following unproductive engagement with AWE’s Board, CERCG Australia has now decided to make a direct offer to AWE Shareholders. This decision also follows encouragement from AWE Shareholders for CERCG Australia to do so.

Managing Director of CERCG Australia, Ms Liping Xuan, said that further analysis of the Waitsia field undertaken by CERCG has indicated that AWE should be able to update its attributable Waitsia 2P Reserves estimate to at least 500 PJs.

She said this supported an increase from CERCG’s previous indicative proposal price of $0.71 to the Offer Price of $0.73.

CERCG said that if the AWE Board were to agree to provide CERCG with due diligence access to specific and previously requested non-public information, this may reveal other currently unidentified value.

“We are pleased to make this Offer directly to AWE Shareholders which provides them with the opportunity to lock in certain all cash value at an attractive price while removing the significant operational and market risks associated with AWE. We are also pleased that AWE Shareholders, who are the ultimate decision makers, will have an opportunity to realise compelling value for their Shares,” Ms Xuan said.

CERCG said that if the AWE Board were to agree to provide CERCG with due diligence access to specific and previously requested non-public information, this may reveal other currently unidentified value.

In a bid that values AWE at approximately $463 million, the Offer will be made by CERCG Australia’s wholly owned subsidiary, CERCG Aus Gas Pty Ltd and will extend to:

* all Shares issued under AWE’s recently announced Share Purchase Plan (SPP); and

* all shares issued on valid vesting of all cash share rights currently on issue, and in accordance with Condition (i)(ii) of this Offer in the Schedule.

CERCG is an international and fully integrated energy company. CERCG invests in, develops, operates and manages oil and gas exploration projects, field developments, gas processing facilities, liquefied natural gas (LNG) production plants, gas and fuel storage, compressed natural gas (CNG) transportation and distributions and petrol chemicals. The business is involved in all three of the upstream, midstream and downstream oil and gas sectors.

CERCG has recently decided to expand its international operations and is pursuing assets which meet its technical and quality criteria. It is an objective of CERCG to become a significant and reliable domestic gas supplier of the Australian market.