Eric Lam, Financial Post Published: Friday, July 03, 2009

Oil and gas company Canadian Superior Energy Inc. said Friday its former partner BG International Ltd. is looking to block a contentious $142-million sale of an offshore natural gas drilling platform.

The sale to British Centrica PLC for 45% of Block 5(c) off the coast of Trinidad was announced on June 2 and is crucial to Canadian Superior's restructuring after filing for bankruptcy in March.

BG International has right of first refusal and looks set to exercise it, after sending a "notice of election" to Canadian Superior.

BGI owns a 30% stake in the property.

Canadian Superior had hoped to close the deal by August, but that now looks unlikely as BGI's action further complicates a messy dispute over the property.

Canadian Superior's founder Greg Noval and chief executive Mike Coolen were forced out by the company board of directors in April over concerns over the rushed proposed sale to Centrica.

Institutional investor Palo Alto Investors had sent a letter to the board in February opposing the sale.

"We believe that selling this asset now, immediately after the exploration phase and before ultimate project sanction, is not in the best interests of Canadian

Superior or its shareholders," the letter said. "We believe the Canadian Superior board owes an answer to shareholders on this topic."

Around the same time, BGI convinced an Alberta court to take control of the site away from Canadian Superior and appointed Deloitte and Touche as receiver.

BGI and Canadian Superior had originally discovered the natural gas site in January 2008 along with Challenger Energy, which is also currently under CCAA protection.

Challenger subsequently attempted to sell its 25% stake in Block 5(c) with no takers, leading Canadian Superior to purchase the struggling company in an all-stock deal worth about $78-million.

Alexander Klein, analyst with Blackmont, questioned the validity of Challenger's stake because Centrica did not attempt to acquire it.