Dana Petroleum, of Aberdeen, announced the £270million acquisition of Petro Canada Netherlands (PCN) yesterday, the biggest deal since its formation in 1994.
PCN operates in the Dutch sector of the North Sea and 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, which is expected to be completed in the third quarter. Its 2010 production guidance had been 37,000-41,000 barrels of oil equivalent per day (boepd).
Following the 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.
PCN will give Dana 51million barrels of proved, probable and possible reserves plus unrisked prospective resources of up to a further 67million barrels.
Dana said that, in connection with the acquisition and as part of a broader corporate refinancing initiative, it has agreed terms with the Royal Bank of Canada for a £612million term loan and revolving credit facility.
The Aberdeen company has a market value of just over £1billion.
The sale of PCN is part of a divestment programme by Canadian integrated energy company Suncor. Dana chief executive Tom Cross said: “This transaction represents Dana’s fourth international acquisition in . . . three years and is the most significant and exciting development in the company’s history.
“It builds upon our portfolio approach to the exploration and production business and provides a signi-ficant production and reserve growth step for the group.”
He said it also added considerably to Dana’s operating capability in the North Sea, better positioning it to capitalise on the operated developments emerging from its portfolio and to pursue further operated opportunities in the future.
He said it extended the company’s UK gas business and provided a first-time exposure to gas-storage technology and opportunities, adding: “Together with the emerging gas development potential in the Nile Delta and offshore Morocco, the group will be more balanced with an approximately 60:40 oil-gas ratio in proved and probable reserves and 70:30 oil-gas ratio in near-term production.”
Independent analysts at Citi said it was a sensible acquisition, building on Dana’s North Sea portfolio and expected to be accretive to earnings from this year.
They said the headline price appeared fair.
Shares in Dana Petroleum closed up 15p at £11.03.
