Korea National Oil Corporation (KNOC) remained in talks with Dana Petroleum on a takeover that could potentially be worth £1.3billion-plus, a KNOC source said yesterday.
This news is contrary to market rumours that state-run KNOC had ended discussions to acquire the Aberdeen-based oil and gas company.
The KNOC source said: “Negotiations with Dana are still progressing, but no agreement has yet emerged.”
A Dana spokesman declined to comment.
Shares in Dana closed last night unchanged at £14.83.
KNOC said at the start of this month it was in very preliminary talks over a possible cash offer for Dana.
Mark McCue, a divisional director at broker and wealth manager Brewin Dolphin in Aberdeen, believes Dana could be subject of a bidding war, which might drive the price up to more than £20 a share.
Other potential suitors could include Austrian oil and gas company OMV.
Dana, which employs more than 100 people, has come a long way since being founded in 1994 by chief executive Tom Cross and a small group of investors with less than £300,000 of initial capital.
If Dana were to be sold, it would mean the disappearance of a second large Aberdeen-based oil company in less than 12 months.
Centrica took over Venture Production in a £1.3billion deal last year.
Dana said last Friday it would soon be producing 50,000 barrels of oil and gas per day.
In June, it revealed the £270million acquisition of Petro Canada Netherlands (PCN), the Granite City group’s biggest deal yet.
PCN had net production of more than 12,000 barrels of oil equivalent per day (boepd) in the past year and, after the deal completes this quarter, Dana’s daily production will increase substantially.
The Aberdeen group is involved in a 20-well drilling campaign this year.
Mr Cross said: “This will be a record number of E and A (exploration and appraisal) wells drilled in a single year by the Dana group.
“We look forward to the next few months, which will be the busiest exploration and development period in Dana’s history.”