Dana Petroleum said in a statement after the stock market closed yesterday that it had received a bid approach.
The Aberdeen oil company said: “The board of directors of Dana notes the recent movement in the company’s share price and confirms that it has received a very preliminary approach which may or may not lead to an offer for the company.
“Discussions are at a very early stage and as such there can be no certainty as to whether any offer will be forthcoming nor as to the level at which any offer might be made. Further announcements will be made in due course, as appropriate.”
Dana shares, up nearly 4% to £11.76 yesterday, were still well down on the 52-week high of £15.49.
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.
Mark McCue, a divisional director at broker and wealth manager Brewin Dolphin in Aberdeen, said: “While it would be sad to lose another listed stock so soon after the takeover of Venture, money talks and investors might find it difficult to walk away from an attractive offer.
“Any bid could also re-ignite interest in a number of oil and gas stocks which have seen their share prices languish over recent months.”
Jeremy Cresswell, editor of the Press and Journal’s Energy supplement, said the news came as no surprise, adding: “In many ways, it will be a shame if Dana gets taken over by a foreign company, but no surprise if that happens. If that turns out to be the case then perhaps the best Aberdeen can hope for is that Dana chief executive Tom Cross gets to continue to build Dana. If so, then it would be business as usual . . . sort of. It is interesting to note that Goldman Sachs has just upped the target price for Dana from close to £17 to just over £21.”
Just last month, Dana announced the £270million acquisition of Petro Canada Netherlands (PCN), the biggest deal since its formation in 1994, which has more than 160 staff and an office in The Hague. Dana, which has a workforce of 108, plans to retain the PCN employees and Dutch office.
The Aberdeen company’s output will get a boost from the deal. Its 2010 production guidance had been 37,000-41,000 barrels of oil equivalent per day (boepd).
Following the PCN acquisition, Dana estimates its production will rise by 8,000-9,000boepd in 2011 – equivalent to a 20-25% increase on the previous guidance – with an increase of 10,000-14,000 boepd in 2012.
Dana said that, in connection with the PCN deal and as part of a broader refinancing, it had agreed terms with the Royal Bank of Canada for a £612million term loan and revolving credit facility.