ENOC offers to buy Dragon Oil

Emirates National Oil Company Ltd. (ENOC) has launched an offer to buy all Dragon Oil shares it doesn’t already own. ENOC already owns approximately 53.9 per cent of the existing share capital of Dragon Oil.

Dragon Oil is an independent oil and gas exploration and production company with its main asset being the Cheleken contract area in the eastern section of the Caspian Sea, offshore Turkmenistan. The area comprises two oil and gas fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).

Under the terms of the offer by ENOC, Dragon Oil shareholders would receive 750 pence in cash for each Dragon Oil share they have.

The offer values the Dubai-headquartered Dragon Oil at approximately £3.7 billion, and the shares of Dragon Oil not already owned by ENOC at approximately £1.7 billion.

The offer represents a premium of approximately 47.2 per cent to the closing price of 509.5 pence per Dragon Oil Share on 13 March 2015, the business day immediately before the date of the first approach by ENOC.

The company had first offered 650 pence per Dragon Oil share in March 17, an offer which was rejected. After after a series of further proposals which were also rejected, ENOC on May 21 announced a revised proposal of 735 pence per Dragon Oil Share.

This revised proposal represented a substantial improvement on ENOC’s initial proposal, which eventually lead to today’s 750 pence per share.

Commenting on the Offer on behalf of ENOC, Saif Al Falasi, Group Chief Executive said: “Following our announcement on 21st May, outlining a possible cash offer for Dragon Oil, we met with a number of shareholders in order to give them the opportunity to provide feedback. As a direct result of these discussions, we decided to further improve our Offer to 750 pence per share, which the Independent Committee at Dragon Oil has recommended.

“As a long term and supportive shareholder, we appreciate Dragon Oil’s achievements to date. We believe that Dragon Oil has now achieved as much as is possible through its existing upstream strategy. Moreover, with production close to plateau at its sole producing asset and with an uncertain market backdrop, this Offer provides Dragon Oil’s minority shareholders certainty and a clear opportunity to realise significant cash today.”

“ENOC’s Board and I have great respect for the Board and management of Dragon Oil and we look forward to working with them and the Independent Committee on successfully completing this recommended Offer.”

Commenting on the Offer on behalf of the Independent Committee, Thor Haugnaess, Chairman of the Independent Committee said:

“The Independent Committee believes that ENOC’s cash offer, which is the result of extensive negotiations between the Independent Committee and ENOC, reflects the achievements and future prospects of the Dragon Oil Group and offers Dragon Oil minority shareholders an opportunity to exit at an attractive price.”

If the offer is accepted, ENOC will delist Dragon Oil Shares from trading on the London and Irish Stock Exchanges an re-register it as a private company.

Offshore Energy Today Staff