MOL and INA find natural gas deposits - extended
The first tests of explorative drilling codenamed “Zaláta-1” show that the hydrocarbon stock found in Zaláta will be of a substantial quantity, reported oil and gas company MOL Nyrt yesterday. MOL intensely resisting OMV takeover.
In September 2006 MOL and Croatia's national oil company INA d.d. signed an agreement on a joint exploration in Hungary's Zaláta and Croatia's Podravska Slatina, near the Hungarian-Croatian border, as well as on a joint exploitation of the hydrocarbon reserve of the Dráva Valley. Drilling of the first well, Zaláta-1, was completed in December 2006 reaching the bottom at 3515 meter depth. The layers now tested are between 3,100–3,200 meter. Two of the three stretches being supposed to contain natural gas have already produced gas. The deepest layer yielded 62,000 cubic meter per day and the middle one 337,000 cubic meter per day. (Gazdasági Rádió, Napi Gazdaság, Magyar Hirlap)
OMV CEO Wolfgang Ruttenstorfer announced on July 19 that the company has not given up its designs on MOL. “We will not give up, we are not under any time pressure,” he told Austrian radio. He said he was still convinced that an alliance with MOL could increase energy security in Central Europe and increase performance of both companies in view of stronger international competition, Deutsche Presse-Agentur (dpa) reported. Moreover, he criticized MOL's policy of buying back its own shares. OMV, being MOL's largest shareholder, questioned the shareholder value in MOL's policy of buying back its own shares, Ruttenstorfer said.
On July 18, MOL announced in a stock exchange filing on that it had purchased an additional 210,778 of its own shares during trading the day before, continuing a share buyback program that began in late June, Interfax reported. As a result of the purchase, made at an average price of Ft 29,384 ($165) per share, MOL now directly holds 2.02% of its own shares, while the company also controls approximately another 33% of its own shares through various option and borrowing agreements, it was reported. Hungarian law forbids publicly-owned companies such as MOL from owning more than 10% of its own shares, but MOL has got around this by lending shares to the OTP and MFK banks, which have close links to the energy firm's management.
The OMV boss urged the Hungarian company to enter discussions “objectively, not emotionally,” and hoped that MOL would “come to see the advantages of this cooperation.” MOL has been fiercely resisting all attempts of a takeover by its Austrian competitor, also with the support of the Hungarian government. Hungary's leading energy firm, MOL has a market capitalization of €11.6 billion, ($16 billion) compared to OMV's €12.8 billion ($17.6 billion). Together they could control the majority of the regional market, dpa said.
Moreover, Hungarian newspapers reported on July 18 that MOL has expressed an interest in strengthening its positions on the Slovenian market, most likely through some sort of cooperation with 30% state-owned Slovenian oil firm Petrol, according to Interfax. MOL is mulling expansion in Slovenia and is mainly interested in Slovenia's top oil company Petrol, Szabolcs I Ferencz, MOL spokesman was cited as saying recently. While acknowledging that Petrol is currently not for sale, Ferencz said that MOL has always been interested in acquisition opportunities in Slovenia.
The Hungarian government is also working hard to avoid a takeover. Hungarian Prime Minister Ferenc Gyurcsány recently called on the justice ministry to create a law preventing foreign companies under state control from gaining a controlling interest in strategic Hungarian companies, MTI news agency reported on July 18, cited by dpa. (neurope.eu)
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