Watchdog keeps close eye on Santos bid

IN AN attempt to understand Australia’s burgeoning coal seam methane sector, the competition watchdog has started informal inquiries into Santos’ $606 million bid for Queensland Gas Company.
Watchdog keeps close eye on Santos bid Watchdog keeps close eye on Santos bid Watchdog keeps close eye on Santos bid Watchdog keeps close eye on Santos bid Watchdog keeps close eye on Santos bid

According to a Fairfax report, the Australian Competition and Consumer Commission will investigate whether acquiring QGC would give Santos too much control of the Queensland gas market.

Five years ago, gas output from CSM was negligible. But last year, total CSM production was 53 petajoules, about 15% of eastern Australian gas production.

The sector’s continuing growth is also one of the main factors threatening the viability of the proposed Papua New Guinea-Queensland gas pipeline.

Santos’ bid for QGC follows a friendly merger in August between Arrow Energy and CH4 Gas to become the country’s largest CSM player.

All this recent activity has put the spotlight on other players in the sector, the majority of which have experienced share price increases in the past two weeks.

This morning, junior explorer Molopo Australia was forced to respond to a share price query by the Australian Stock Exchange, which noted a “change in the price of the company’s securities from 3.6c on October 3, to 5c today,” as well as an increase in the volume of trading.

In its response, Molopo explained it had not withheld any information from the market that would explain the share price increase, but pointed to the “other recent corporate activity in the sector which has focused market attention on several coal bed methane companies”.

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