Ophir Energy Plc, the U.K. oil and gas explorer active in Africa, has received informal takeover and merger interest from several parties as a slump in crude oil prices forces independent operators to consolidate, according to people with knowledge of the matter. The shares rose the most in seven months.
London-listed Ophir, which bought Salamander Energy Plc earlier this year, has attracted interest from both companies and financial investors, the people said, asking not to be identified as the information is private. The company, which has a market value of about 615 million pounds ($928 million), is evaluating the proposals but deliberations are at an early stage and it may decide against a deal, the people said.
Independent oil explorers have been battered as concerns mount about their ability to withstand the decline in oil prices. Unlike several of its peers, Ophir has low debt levels and net cash of almost $400 million at the end of June as well as assets in Africa and Southeast Asia, which makes it an attractive target for potential buyers or partners, the people said.
Ophir shares rose 11 percent to 94.10 pence in London trading at 10:57 a.m. giving the company a market value of about 664 million pounds. Earlier, the shares gained as much as 13 percent, the biggest increase since April.
Ophir shares had fallen 40 percent this year through Tuesday, compared with a 15 percent decline at the 12-member FTSE All-Share Oil & Gas Producers Index. The company completed the sale of a 20 percent stake in three gas blocks in offshore Tanzania for $1.3 billion to a unit of Singapore’s Temasek Holdings Pte last year. The company is also working with banks to help find a partner for its multi billion-dollar liquefied natural gas development in Equatorial Guinea, people familiar with the matter said in July.
Genel Energy Plc, another independent explorer listed in London, is in early-stage merger talks with New Age African Global Energy Ltd., according to people familiar with the matter.
A representative for Ophir Energy declined to comment.
Copyright 2016 Bloomberg News.
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