The Korea National Oil Corporation (KNOC) confirmed it was in "very preliminary" talks over a cash offer for Dana Petroleum yesterday as it looks to use a $6.5bn (£4.3bn) war chest to help double the country's oil reserves.
Dana shares jumped 22 per cent to 1,440p. "We had approached Dana but no concrete progress has been made," a source at the state-run KNOC said. Analysts in London were sceptical about a deal, however, given the the reported price of 1,800p. "If the shares reach 1,500p today we would recommend selling on the grounds that it's far from certain the deal will go through," said Richard Griffith, an analyst at Evolution Securities.
KNOC, which hopes to more than double South Korea's oil reserves this year to 300,000 barrels per day, had said it wanted to complete a major deal in the first half of the year. Last year, it paid $1.7bn for Canada's Harvest Energy in the country's biggest energy deal.
Dana has proven and probable reserves of 223 million barrels of oil from 36 oil and gas fields in regions such as Egypt, the North Sea and Morocco.Reuse content