Paul Fudge builds 10% stake in AJ Lucas
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.
Frequently Asked Questions about this Article…
Paul Fudge is one of Australia’s wealthiest businessmen who built energy holdings via his private vehicle Pangea Resources. His near-10% stake in AJ Lucas signals a major backing of the company’s shale and coal-seam gas assets, including its European exposure, and is notable because he increased his holding from roughly 2% before the recent capital raising.
A Fudge-controlled entity, Belbay Investments, disclosed a 9.9% stake in AJ Lucas. At the time of the article, with AJ Lucas shares closing at $1.20, that holding was worth about $33 million.
Fudge previously earned about $660 million from selling a coal-seam gas permit to Origin Energy in 2009 via Pangea Resources. Since then he has maintained acreage in Queensland, the Northern Territory and NSW, and expanded interests into European shale and coal-seam gas opportunities.
Paul Fudge acted as an underwriter of the retail investor component of AJ Lucas’s $148.8 million placement and rights issue, helping to support the capital raising that enlarged his effective stake.
The share issue was priced at $1.20, a steep discount to the company’s pre-issue price of $1.60. After the issue was completed, AJ Lucas shares traded around the $1.20 issue price.
Bowlands is a potentially valuable coal gas and shale prospect in Britain. AJ Lucas sold a 25% equity stake in Bowlands to Centrica (formerly British Gas), reducing Lucas’s combined direct and indirect holding in the prospect to 43.5%.
Fudge holds acreage in Queensland, the Northern Territory and New South Wales. His NSW acreage is adjacent to AGL tenements at Taree on the central coast, but the article notes onerous government regulation has locked up much of that land for now.
The article cites British Energy Secretary Ed Davey saying shale gas could potentially cut domestic gas prices by as much as a quarter. That comment highlights why companies with shale and coal-seam gas assets, like AJ Lucas, can attract investor interest.
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