Paul Fudge builds 10% stake in AJ Lucas

One of Australia's richest businessmen, Paul Fudge, has snared a 10 per cent stake in AJ Lucas, extending his shale and coal seam gas interests to Europe in the process.

One of Australia's richest businessmen, Paul Fudge, has snared a 10 per cent stake in AJ Lucas, extending his shale and coal seam gas interests to Europe in the process.

Mr Fudge, through his privately held Pangea Resources, pocketed $660 million from the sale of a coal seam gas permit to Origin Energy in 2009. Since then he has extended his interests in the sector, as well as ploughing money into buying racehorses and establishing a stud in the Southern Highlands of NSW.

Earlier this week, a Fudge-controlled entity, Belbay Investments, disclosed a 9.9 per cent stake in AJ Lucas, the troubled driller and contractor, which has its foot on potentially valuable coal gas and shale assets in Europe.

At Lucas's Thursday closing price of $1.20, Mr Fudge's holding is worth $33 million. Before the recent placement and rights issue, he held only about 2 per cent of the company's capital.

Mr Fudge was an underwriter of the retail investor component of AJ Lucas's $148.8 million placement and rights issue, which was conducted last month.

That raising followed the sale of a 25 per cent equity in its potentially valuable Bowlands prospect in Britain to local utility Centrica, formerly known as British Gas. That reduced Lucas's direct and indirect holding in Bowlands to 43.5 per cent.

After making his money in textiles, Mr Fudge was an early mover into coal seam gas in Queensland, where he still has acreage, as well as in the Northern Territory and NSW.

His NSW acreage is adjacent to AGL tenements at Taree on the central coast, but onerous government regulation has locked up much of this land for the time being.

The share issue was priced at $1.20, a steep discount to its price of $1.60 before the issue, although since the issue was completed the shares have traded at about the issue price.

Mr Fudge's emergence with a major stake in AJ Lucas comes as the British Energy Secretary, Ed Davey, said this week shale gas could cut domestic gas prices as much as a quarter.

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