Macquarie joins Central Petroleum in Mereenie

Macquarie has nabbed a 50pc stake in the Mereenie oil and gas field half-owned by Central Petroleum.

Central Petroleum Managing Director Richard Cottee outside Alice Springs.

Macquarie Group continues to eye a closer relationship with oil and gas minnow Central Petroleum, claiming a 50 per cent stake in the Mereenie oil and gas field west of Alice Springs from Santos.

Macquarie will split ownership with current operator Central Petroleum, a company the investment bank made a failed bid for last month.

For Santos, meanwhile, it marks a quick retreat from the project after it hived off 50 per cent to Central Petroleum in June last year for $45 million upfront.

Santos has been looking to shed its non-core assets over the past year, with the activity culminating in a shake-up of the company this month that will separate its five core assets.

Macquarie’s entry price is unclear, although it again highlights its interest in the assets held by Central Petroleum as it undertakes due diligence on the group.

Macquarie already has a 2.3 per cent holding in the Richard Cottee-led junior and also serves as its chief financier.

It launched a 17.5c a share bid for control of the company on November 14 and while that offer was rejected, Mr Cottee left the door open to improved terms.

“The board of directors of the company has determined that the proposal is not in the best interests of shareholders,” he said in a statement.

“In the circumstances, however, the board considers it appropriate to grant due diligence access, subject to appropriate documentation, to provide Macquarie every opportunity to reconsider its proposal.”

The initial offer represented a valuation of $75.8 million.

Central Petroleum has long drawn media attention given its grand energy ambitions in the Northern Territory, with the appointment of high-profile executive Mr Cottee in 2012 further sharpening the spotlight.

Mr Cottee gained fame as he led Queensland Gas Company from a minnow to an eventual sale to BG Group for $5.7 billion in 2008.

At 1pm (AEDT), Central Petroleum shares were steady at 19c, Macquarie was off 0.4 per cent at $87.55 and Santos was down 0.6 per cent at $3.955.