Dragon Oil eyes up Cameroon explorer BowLeven
Announcement by ENOC-controlled Dragon sends BowLeven shares up 62%
Shares in Scottish oil explorer Bowleven surged 62% on Friday after Dragon Oil, a London-listed independent controlled by Dubai’s ENOC, released a statement confirming that it was considering a bid.
“Dragon Oil notes the recent movement in Bowleven's share price and confirms that it is in the preliminary stages of exploring a possible offer for all of the issued and to be issued share capital of Bowleven,” said Dragon Oil in a statement.
The company has until 16 March to decide whether to bid formally for Bowleven, under London Stock Exchange rules.
Bowleven’s share price has been battered by a series of disappointing exploration announcements through 2011, and has been struggling to raise the funding it needs to complete its planned exploration program begin to convert recoverable to production.
The company has a market capitalization of $562 million after the share bounce, and its directors have estimated that $115 is required to fund its 2012 drilling program and $400 million to develop its commercial finds to production.
Small-cap independents have found raising debt and equity finance more difficult since 2008, increasing the attractiveness of takeover bids.
Dragon Oil has been sitting on a $1.5 billion cash pile and has been seeking to diversify its assets from the Cheleken Contact Area offshore Turkmenistan for some time.