East African Natural Gas Up for Grabs (APC, PTR, SHI)

East African Natural Gas Up for Grabs

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

London-based Cove Energy has put itself up for sale. Cove has an 8.5% stake in a natural gas play off the coast of Mozambique. Analysts hypothesize that one of many Asian gas buyers will make a bid for the company.

A closer look
An 8.5% stake doesn't seem like much, until you realize that it's a percentage of one of the biggest offshore natural gas finds in the last 10 years.

The Rovuma Area 1 offshore block was discovered by Anadarko Petroleum (NYSE: APC ) at the end of August. Originally thought to hold 6 trillion cubic feet of gas, Anadarko came back at the end of November with an announcement that early well results indicate that recoverable reserves are probably closer to a whopping 15 to 30 Tcf of natural gas.

Cove Energy is expected to sell for more than $1 billion. Anadarko, for that matter, may also be in the market to sell a stake in its Mozambique assets to offset the burden of its $4 billion payment to BP for its role in the Macondo well blowout in the Gulf of Mexico in 2010.

Prospective buyers
So, who wants Cove's gas? One upside to picking up these assets is that Anadarko is also planning an LNG export facility in the area, something that has appealed to Asian gas buyers in the past. China's Sinopec (NYSE: SHI ) has an Australian joint venture with ConocoPhillips for just that reason. And in fact, Sinopec is one of the companies analysts expect to be interested in Cove.

Tokyo Gas and Korea Gas may also be in the mix. Japan and South Korea are the world's two largest natural gas importers, though China is eventually expected to overtake them.

Indeed, it is the Chinese companies that have been particularly active of late. PetroChina (NYSE: PTR ) recently announced that it purchased the remainder of a Canadian oil sands McKay River project in Alberta. The company had held a 60% stake in the project since 2009.

Foolish takeaway
Technological advances have unlocked global oil and gas supplies, which means the industry is rife with mergers, acquisitions, and joint ventures right now. It can be difficult to stay on top of all the activity, but utilizing free Internet tools like Twitter and My Watchlist can help keep you up to speed on industry updates and analysis.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by @TMFDuffy.

The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.