South Korean company Posco International has improved its cash takeover proposal for the Australian onshore oil and gas producer Senex Energy which said it intends to accept the offer.

Posco has already made several offers, and Senex said today it had received another improved non-binding proposal of A$4.60 cash per share to acquire 100% of Senex by way of a scheme of arrangement.

The offer values Senex at about A$826 million.

Senex said its board intends to unanimously recommend that shareholders accept the scheme.

An exclusivity period for Posco has been extended until 26 November 2021 to allow time to negotiate and enter into a Scheme Implementation Agreement and for Posco to secure its internal approvals.

Senex pointed out there is no certainty that discussions between itself and Posco will result in any binding agreement, and that its shareholders do not need to take any action at this time.

The company also announced today it has entered into a binding agreement with Australia Pacific LNG to acquire undeveloped onshore gas fields in Blocks PL 209 and PL 445, adjacent to Senex’s Atlas natural gas development in Queensland.

The purchase price is A$80 million in cash, and Senex said its Atlas production will increase to 30 petajoules (28.3 billion cubic feet) of gas per year in 2024.

Senex is a consistent performer in Australia, with annual production in the year ending 30 July of 3 million barrels of oil equivalent, up 140% on 2020.

Its annual revenue was A$110 million, and underlying Ebitda was up 178% year on year at A$55 million. The company's proven and probable reserves were 767 petajoules.

For Posco, which is a large South Korean conglomerate, this deal will mark its debut in Australia's upstream industry.

The energy analyst Wood Mackenzie said last month: “An acquisition of Senex provides Posco with exposure to Australia’s east coast gas market at an opportune time. The Australian east coast supply demand outlook is precariously balanced, and a lack of new supply sources is expected to lead to rising prices.”

Woodmac research director Angus Rodger said: “Posco's existing portfolio is heavily weighted towards Myanmar and the producing Shwe gas field. However, the company has come under considerable pressure following the country’s military coup and has already halted other business interests in the country."

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