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Dana Petroleum PLC (DNX)

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Thursday 12 August, 2010

Dana Petroleum PLC

Offer Update

RNS Number : 9613Q
Dana Petroleum PLC
12 August 2010
 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

Dana Petroleum plc ("Dana" or the "Company")

12 August 2010

 

Update on unsolicited indicative conditional proposal from Korea National Oil Corporation ("KNOC")

 

The Board of Dana provides the following update in connection with the unsolicited indicative conditional approach from KNOC.

 

Following repeated unconditional invitations from Dana to meet with senior KNOC Board representatives, Dana's Chairman and Chief Executive Officer flew to Calgary, Canada, in order to fit in with KNOC's availability, to meet with the Senior Executive Vice President of KNOC on 6 August, with a view to progressing the proposal in a friendly and constructive manner (the "Meeting").

 

In the Meeting, Dana requested clarity as to how, or if, KNOC would reflect recent and future developments within Dana in its indicative, conditional proposal of 1800p per Dana share (the "Proposal"). KNOC communicated that it would be unwilling to increase the level of its Proposal regardless of any new information it may be given. It is very clear to the Dana Board that KNOC is also unwilling to ascribe any value to Dana's ongoing business development programme, despite KNOC being aware of significant, well advanced, non-public and valuable activities in this area, which could materially increase Dana's oil production and reserves in the near term, and which Dana believes would be in line with KNOC's publicly stated strategy of acquiring reserves and production.

 

Also, in the course of the Meeting, Dana provided a comprehensive update on the value enhancing developments that have taken place within Dana's portfolio since the date of KNOC's Proposal, including:

 

·      Fin oil discovery, and nearby Lorcan oil discovery, onshore Egypt

·      Blackbird oil discovery and successful flow test

·      Imminent completion of the acquisition of Petro-Canada Netherlands B.V.

·      New 50/50 joint venture with BG Group in the El Manzala concession in Egypt

·      Increase in the value of Dana's stake in Faroe Petroleum following Faroe Petroleum's significant Maria oil discovery in the Norwegian Sea

·      Increased oil production at the Ettrick field

·      Imminent first production from the Babbage field

·      Ongoing exploration drilling programme with a significant number of wells in the second half of 2010, including current drilling of the Anne Marie well offshore the Faroe Islands and the near term drilling of the Cormoran prospect offshore Mauritania

 

At the Meeting, Dana invited KNOC to conduct due diligence subject only to the signature of a non-disclosure agreement. At the end of the Meeting, KNOC provided Dana with its own timetable in which KNOC confirmed that the first step was to be the signature of a non-disclosure agreement to be entered into by 9 August.

 

However, on 9 August, KNOC then refused Dana's invitation to enter into a non-disclosure agreement. KNOC has stated that it will not conduct due diligence without the Dana Board's recommendation of KNOC's Proposal. KNOC has also refused to discuss either the value of Dana's assets or KNOC's assumptions behind the Proposal.

 

KNOC's refusal to sign a non-disclosure agreement leaves the Dana Board with no way of progressing confidential discussions with KNOC.  

 

The Dana Board does not consider it is prudent or warranted to provide a recommendation to any conditional, unsolicited proposal at this level. In addition, the Dana Board believes KNOC has failed to recognise the value of the Company's recent developments and work in progress.

 

 

The Board of Dana has made every effort to encourage and assist KNOC to come forward to discuss value and perform appropriate due diligence, subject only to signing a non-disclosure agreement, to enable KNOC to make a full and fair assessment of the value of Dana.

 

The Board of Dana has committed considerable Board and senior management time over the past weeks in the interests of co-operating with KNOC following its unsolicited approach. This commitment has involved a significant number of communications between representatives of the Dana Board and KNOC, and between the parties' respective advisers. In addition, the Board of Dana notes that KNOC has also failed to respond to the Dana Chairman's and Chief Executive Officer's offer to travel to Korea to meet with KNOC's Chairman, President and CEO and other members of the KNOC Board.

 

The Board of Dana looks forward to clarification from KNOC regarding its current intentions in connection with its Proposal. Despite KNOC's refusal to date, Dana continues to extend its invitation to KNOC to access further details of certain material ongoing developments in the Company to enable it to update its assumptions on, and make a full and fair assessment of, the value of Dana.

 

The Board of Dana continues to pursue actively all opportunities to maximise shareholder value, which remains the overriding imperative for the Dana Directors. The Board of Dana will keep shareholders informed of any material developments. The Company expects to announce its 2010 interim results in the week commencing Monday 23 August, highlighting Dana's financial and operating performance for the first six months of this year.

 

There can be no certainty that an offer will ultimately be made by KNOC for Dana or the terms on which any such offer may be made.

 

This announcement has been made without the consent of KNOC.

 

Enquiries

 

Dana Petroleum Plc

01224 652 400

Colin Goodall, Chairman


Tom Cross, Chief Executive Officer




RBS Hoare Govett

020 7678 8000

Stephen Bowler


John MacGowan




RBC Capital Markets

020 7653 4000

Tim Chapman


Josh Critchley




College Hill Associates

020 7457 2020

Nick Elwes


 

 

RBS Hoare Govett, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Dana and no one else in connection with the Proposal and this announcement and will not be responsible to anyone other than Dana for providing the protections afforded to clients of RBS Hoare Govett nor for providing advice in connection with the Proposal or this announcement or any matter referred to herein.

 

RBC Capital Markets, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Dana and no one else in connection with the Proposal and this announcement and will not be responsible to anyone other than Dana for providing the protections afforded to clients of RBC Capital Markets nor for providing advice in connection with the Proposal or this announcement or any matter referred to herein.

 

 

Disclosure requirements of the Takeover Code (the "Code")

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

 

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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