If there isn’t platinum in Lapland, perhaps there is oil in Mozambique. That is the way speculative resource exploration works, and when it pays off, it pays off handsomely. Hats off to exploration veteran and geologist John Craven, who has persuaded Shell to hand over nearly £1bn for Cove Energy, the Africa-focused oil explorer he created in 2009 (out of Lapp Plats, which was doing as its name suggests – prospecting for platinum in the frozen north). The proposed deal is a sign that east Africa’s natural resources potential is something the supermajors can no longer afford to ignore.

Cove has an 8.5 per cent stake in the Rovuma gas field in offshore Mozambique, part of a 2.6m-acre exploration area with high quantities of gas. Anadarko, the operator, says it could contain up to 30tn cubic feet of recoverable resources. Last week Eni, the Italian oil company, doubled its estimate of resources in another field nearby. Shell is the most gas-focused of the international oil companies; its move to establish a presence in Mozambique lends credibility to the claims being made for the region’s potential.

Cove’s £1bn valuation looks steep – a 73 per cent premium to the undisturbed share price from January 4. That should have other independent exploration companies calling their advisers. Some merger and acquisition activity focused on east Africa has already happened: Ophir Energy bought Dominion Petroleum last year, and Ophir has sold a slice of its gas discoveries off Tanzania to BG Group.

Since Cove put itself up for auction at the end of 2011, shares in independent explorers have soared. Ophir is up 38 per cent so far this year; Gulf Keystone has jumped nearly 100 per cent. The sector looks to be back in the M&A limelight. But a lot of takeover premium is already priced in even before the serious action gets under way.

Email the Lex team in confidence at lex@ft.com

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