Verenex looking at financial options
Verenex Energy Inc. said on Monday it is undertaking a "strategic review" of its options to increase its value, often the first step in finding a buyer for a company.
The Calgary-based company's announcement comes on the same day as the takeover of Calgary's First Calgary Petroleum Inc. by Eni SpA.
Both companies have major holdings in North Africa, Verenex in Libya and First Calgary in Algeria.
Verenex did not give specific reasons for the decision to begin looking at various financial alternatives, only saying in a news release "the board of directors has... determined that it is an appropriate time to assess the range of strategic options available to Verenex to maximize shareholder value."
Verenex has already drilled a number of wells in the Libyan desert and expects to start production in that country within two years. The company said it is already talking to banks regarding securing financing for the commercialization of its oil projects.
Verenex has predicted that the Libyan property, which contains mostly oil, will yield 50,000 barrels of oil per day when it reaches maximum production.
Verenex, which is owned 42 per cent by Vermillion Energy Trust, has seen its stock slip gradually from a near-term high of $9.64 on Aug. 1 to the $7.50 range. Industry analysts have pegged the long-term value of Verenex at between $11 and $19 a share.
Shares in the company rose $1.57, or more than 21 per cent, to close the trading day at $8.99.
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