Dana Petroleum is trying to battle off a hostile takeover from South Korean government owned KNOC. KNOC has made an offer of 1.87 billion to shareholders. While trying to fight off the takeover bid Dana has announced a 240 million pound acquisition of Petro-Canada UK’s exploration and production assets.
The acquisition will be important to Dana Petroleum’s output. The deal will mean an additional 20,000 barrels of oil per day to production. This will amount to Dana reaching 70,000 barrels per day of oil by end of year once the acquisition is finalized. The eight production fields of Petro-Canada UK will bring Dana to 63 operating fields.
Dana Petroleum’s Chief Executive, Tom Cross, said: “The acquisition is directly in line with our strategic goals of increasing Dana’s operated North Sea reserves and production.
“With this deal, Dana becomes a much stronger business, increasing our oil production and cash flow significantly.”
Dana released a document recently to the stock market that was compiled by independent experts showing Dana’s current value and future estimated value. The report valued the company’s shares between 2270p and 2465p share. They also noted the company could build its reserves four times the current level by end of 2012.
Colin Goodall, Dana’s Chairman, said: “For proof that Dana is worth much more than 1800p per share, our shareholders need look no further than KNOC’s extraordinary actions.
“For a national oil company to launch a hostile offer without access to detailed technical information, means KNOC must be highly confident that the Dana assets are worth much more than their offer price.
“KNOC has an urgent need for reserves and production to meet its published corporate targets, set by national priorities.
“Dana’s assets and operational management teams are of strategic importance to KNOC and Dana shareholders should rightly demand a full and fair value for surrendering control of a strong independent company.”
Cross also added: “The Dana directors have one overriding priority – to maximise value for all Dana shareholders.
“Since the first moment KNOC approached Dana, we have held out the hand of friendship and asked KNOC repeatedly to hold a proper value discussion with the board of Dana.
“KNOC has consistently refused this path.
“KNOC’s bid is simply not reflective of the true value of the company.”