Dana Petroleum’s board today posted a circular to its shareholders setting out the valuation of Dana based on an independent expert’s asset valuations. The company said that the expert’s report supports the board’s view that the offer made by Korea National Oil Corporation (KNOC) for all the issued and to be issued shares of Dana and its Convertible Bonds is inadequate and fails to recognise Dana’s existing value and strategic importance to KNOC.
In a statement, the company said that the: “board unanimously recommends that shareholders reject the inadequate and unsolicited offer. The board believes that KNOC’s offer, first proposed to the company in July prior to Dana’s strong interim results and the announcement of today’s value accretive UK acquisition, fails to reflect.
Dana’s defence circular highlights that the company is in a period of transformational growth. Dana ended 2009 with average production of 38,653 barrels of oil equivalent per day (boepd), and expects to end 2010 with a pro forma production exit rate of approximately 70,000 boepd.
During 2010 so far, Dana has added 87.5 million barrels of oil equivalent (mmboe) through the drill bit and acquisitions. From now until the end of 2011, Dana will be targeting up to 600 mmboe through its drilling programme. KNOC was unaware of the scale of Dana’s exploration programme and the impact of the acquisition of the UKCS oil producing interests of Petro Canada UK Limited (the “PCUK Assets”) when it tabled its £18 (US$28) offer.
Colin Goodall, chairman of Dana commented:
“For proof that Dana is worth substantially more than 1800p per share, our shareholders need look no further than KNOC’s extraordinary actions. For a national oil company to launch a hostile offer without access to detailed technical information, means KNOC must be highly confident that the Dana assets are worth much more than their offer price.”
“KNOC has an urgent need for reserves and production to meet its published corporate targets, set by national priorities. Dana’s assets and operational management teams are of strategic importance to KNOC and Dana shareholders should rightly demand a full and fair value for surrendering control of a strong independent company, with high quality assets dominated by OECD oil production.”
