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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (1506)	3/1/2000 5:30:00 AM
From: Tomas	Read Replies (1) \| Respond to of 2742

Financial Times, March 1: Currently there are only a handful of privately-owned E&P companies in the world. The two most notable are Lundin, the Swedish family-owned group and Hunt Oil Company, the US family-owned group. Full article: E&P share prices may spark buying By Matthew Jones - Financial Times, 1 Mar 2000 Analysts are predicting the depressed share prices in the oil exploration and production sector will lead to some companies being taken private this year. British independent E&P companies are expected to announce record earnings and cash flow levels when the results season begins with Lasmo on Wednesday and Enterprise oil on Thursday. But despite shares trading at an average 40 per cent discount to net asset values, the mid-sized oil companies have been unwilling to buy them. Analysts believe there is now growing interest among corporate financiers in the energy sector to raise private equity to buy E&P companies. Last week it was revealed the heads of energy banking at Goldman Sachs and Morgan Stanley Dean Witter in the US are leaving their jobs to jointly form a private equity fund. Observers in the City say there are indications more will follow in the UK. "This is currently the talk of the City. I believe a number of private equity outfits are looking at buying E&P companies," said one oil company executive. Iain Reid, analyst at Warburg Dillon Read, believes a private acquisition of Lasmo, through a leveraged buy-out, could achieve a 70 per cent return if the company was later sold at its asset value. Enterprise Oil, which has been less out of favour with the market, would return 30 per cent as a result of its lower discount to the asset value. "Even if a premium was paid to the current share price the awards would be considerable," said Mr Reid. The large amounts of cash being generated due to the high oil price mean LBO debt could be paid back within three years for Lasmo and Enterprise. Mr Reid believes LBO loans could also be used to buy smaller companies with similar results, including Cairn, Soco and British Borneo. Crude oil prices have risen to post Gulf War highs of about $28 a barrel over the past year, but shares in the sector have sunk to levels more associated with prices of $11 a barrel as the market ditches traditional stocks in favour of high growth "TeleTech" investments. Currently there are only a handful of privately-owned E&P companies in the world. The two most notable are Lundin, the Swedish family-owned group and Hunt Oil Company, the US family-owned group. Hicks Muse Tate and Furst, the Texas investment group, also bought a significant stake in Triton Energy, the US group, last year. news.ft.com