Dragon Oil shares rocket 14% after offer

SHARES in Dragon Oil rocketed 14% yesterday after the exploration company confirmed it had received an approach to buy a major shareholding.

The company, which is listed in Dublin and London but headquartered in Dubai in the United Arab Emirates, said it was in early-stage talks with a potential buyer of 48% of the company.

The Emirates National Oil Corporation (ENOC), which is owned by the Dubai government, owns the remaining 52% of the company but will retain its entire shareholding even if the deal goes ahead.

The approach triggered substantial demand for Dragon shares, driving the company’s market capitalisation over €800 million.

But the share price fell back slightly in late trading, when gains on the previous close were trimmed back to 10%.

“The partial offer, if made, would be in respect of the ordinary share capital not currently owned by Emirates National Oil Corporation Company Limited, which has informed the board that it intends to retain its shareholding in Dragon Oil,” Dragon said in a statement to the London stock exchange.

“The approach is preliminary in nature, and thus there can be no certainty that an offer will ultimately be forthcoming.

“A further announcement will be made in due course.”

Dublin corporate finance firm Davy will advise Dragon during the talks process.

Dragon’s main interests lie in oil fields off the coast of the former Soviet republic of Turkmenistan, which lies to the north of Iran and Afghanistan, and borders on the Caspian Sea.

Burren Energy, which was set up by Irish-born Finian O’Sullivan, also has interests in the region.

ENOC, Dragon’s major shareholder, recently denied reports in the Russian media it had been in talks with Russian oil outfit Lukoil about a potential sale of its stake.

“There is absolutely no truth in the report,” Dragon chief executive Hussain Sultan said at the time.

Mr Sultan is also a board member of ENOC.