Dragon Oil plans To Bid Around $800M For Petroceltic


LONDON, Oct 6 (Reuters) - London-listed energy producer Dragon Oil plans to make a near 500 million pound ($800 million) bid for fellow oil firm Petroceltic to boost its presence in Algeria, where it was awarded new oil and gas licences last week.

Petroceltic said on Monday that Dragon Oil intended to offer 230 pence a share, a 35 percent premium to the Irish company's recent average stock price.

At 0745 GMT, Petroceltic shares were up 20.6 percent to 215.25 pence, while Dragon Oil's were down 0.3 percent to 572 pence.

The proposal is not a firm offer and remains to be approved by Dragon Oil's biggest shareholder.

Petroceltic said it would be willing to accept the offer once Dragon Oil's majority shareholder approved it, and if certain unspecified conditions were met.

One of Petroceltic's main assets is the Ain Tsila gas field in Algeria, a market where Dragon Oil recently obtained new drilling licences in a consortium with Italy's Enel.

Dragon Oil's main production assets are in Turkmenistan.

"Petroceltic would bring Dragon Oil additional reserves in its focus areas," a Dragon Oil spokesman said, adding a deal would also diversify its portfolio and give it access to assets across the whole exploration and production cycle.

Petroceltic said any deal would be subject to approval by the Algerian government in relation to its Algerian assets.

"We do not necessarily see this as a catalyst for more M&A in the sector but this could be the first deal in a while that (...) demonstrates the value in the sector," said analysts at BMO Capital Markets in a research note.

(1 US dollar = 0.6262 British pound)

(Editing by Susan Thomas and Mark Potter)


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