Dana pays £270m for Petro Canada Netherlands

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The Independent Online

Dana Petroleum has agreed to buy rival Petro Canada Netherlands for £270m in a deal that will give the Aberdeen-based oil prospector access to the Dutch sector of the North Sea.

The deal, which marks Dana's fourth international purchase in three years and is its biggest acquisition to date, could boost the British group's production guidance for 2010 by 10 to 12 per cent on an annualised basis.

Output for 2011 is estimated to jump by 8,000 to 9,000 barrels of oil equivalent per day (boepd), representing a 20 to 25 per cent rise on previous guidance for the group, while new projects in the Netherlands are pegged to boost figures for 2012 by 10,000 to 14,000 boepd. To help fund the deal, and as part of a wider refinancing exercise, Dana, which holds oil and gas assets in the UK and North Africa, said it had agreed terms for a new $900m (£612m) facility with the Royal Bank of Canada. The facility is made up of a four-year term loan of $300m, and a five-year revolving credit facility of $600m.

Dana is buying Petro Canada Netherlands from a wholly owned subsidiary of Suncor, Canada's largest oil and gas company, which embarked on a divestment programme following last year's takeover of Petro Canada.

Tom Cross, Dana's chief executive, said the deal was "the most significant and exciting development in the company's history".

"Together with Dana's emerging gas development potential in the Nile Delta and offshore Morocco, the group will, following the completion of the acquisition, be more balanced with an approximately 60 to 40 oil to gas ratio in terms of proved and probable reserves and approximately 70 to 30 oil to gas ratio in terms of near-term production," he added.

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