Dragon Oil, a Dubai-based oil company has pulled out of the previously proposed agreement to take over Ireland’s Petroceltic International oil and gas firm.
In an announcement issued today, Dragon Oil said that the proposed offer for all the issued, and to be issued, share capital of Petroceltic at a price of 230 pence sterling per share in cash, would not materialize.
The company said that in the light of prevailing market conditions, it no longer intends to make an offer for Petroceltic. To remind, oil price has dropped around 35 per cent since June, hit further last week by the OPEC decision not to curb oil production despite the oversupply in the market.
Petroceltic unaffected by volatility
Petroceltic International also issued a statement noting the announcement by Dragon Oil, saying: “The Board of Petroceltic remains confident in the ongoing execution of its strategy as an independent company, as stated in the Interim Results published on 17 September 2014.
“Petroceltic’s production and development business has delivered a strong performance to date in 2014, with important progressions made and milestones met regarding our world class Ain Tsila asset in Algeria. In the last twelve months, the farm-out to Sonatrach has closed, funds have been received, the gas sales contract with Sonatrach has come into effect, and the Front-End Engineering and Design contract has been awarded to Chicago Bridge and Iron Company.”
“It is noteworthy that the Company’s flagship gas condensate project in Algeria, which is expected to start production in 2018, is unlikely to be affected by the current volatility in crude oil markets, given the forecast level of oil prices at that time. Additionally, the majority of Petroceltic’s current production is sold at a fixed gas price in Egypt, and is therefore unaffected by short-term oil price volatility.”
Petroceltic said it would host a Capital Markets Day its management would will present the strategy and future plans for the business.
Offshore Energy Today Staff