Taqa readies $4b buyout plan
By Himendra Mohan Kumar, Staff Reporter/GULF NEWS Published: August 27, 2007, 23:06
Abu Dhabi: The Abu Dhabi National Energy Company (Taqa), plans to invest Dh14.68 billion ($4 billion) in new energy acquisitions over the next 12 months, the company’s chief executive said yesterday.
“We are looking at opportunities in Algeria, Libya, Tunisia, Norway, The Netherlands, UK, Canada and possibly, the US,” Peter Barker-Homek told Gulf News.
At present, Taqa has investments, assets and operations in 10 countries – UAE, Canada, Ghana, India, Morocco, The Netherlands, Russia, Saudi Arabia, the UK and the US.
Barker-Homek said Taqa’s latest upstream acquisition – Pioneer Canada – will go through the normal regulatory approval process and is expected to be completed “probably in November this year.”
Taqa said last week that it will acquire the Calgary-based upstream petroleum exploration company for $540 million from Pioneer’s parent – the US-based Pioneer Natural Resources Company.
Pioneer Canada, which has operations in the western Canadian sedimentary basin, would be Taqa’s fifth overseas acquisition since November 2006.
Post acquisition of Pioneer Canada, Taqa’s debt-to equity ratio would be 80 per cent debt and 20 per cent equity.
Talking about the company’s debts, he said: “We have $3.5 billion in bonds that we have issued to the global financial community. In addition, we have, through a syndication of banks, about $6.5 in project finance in our subsidiaries in the UAE.” Barker-Homek said Taqa’s assets are worth $16 billion.
The combined output of Taqa’s upstream assets is currently a little more than 60,000 barrels of oil equivalent per day.
Even if there are no further acquisitions by the company, Taqa can sustain its current production level for several years, said Barker-Homek. “Right now, the average reserve life of our oil and gas properties is 12 years,” he said.
Barker-Homek said Taqa plans to invest $300 million in 2007 to boost output at its oil and natural gas producing assets. “Since January this year, we have invested about $200 million.”
Barker-Homek felt Taqa is grossly undervalued on the Abu Dhabi Securities Market.
“The earnings potential of the company is currently not reflected in the share price. I think the market is probably waiting to see if our acquisitions will add value to shareholders. We plan to maintain and increase the dividend that we established last year,” Barker-Homek added.