British oil and gas explorer Dana Petroleum said it was to buy US rival Devon Energy's entire upstream petroleum interests in Egypt for around $375 million.
Dana said the deal comprises interests in eight production-sharing contracts with 13 producing fields, adding around 12,500 barrels of oil per day to Dana's output.
"This deal will deliver a significant reserves and production growth step for Dana and strategically, the acquisition fits closely with our previous Egyptian transactions," chief executive Tom Cross said in a statement.
"The new portfolio contains a good balance of producing oil fields with numerous attractive drilling opportunities, both on existing fields and within large exploration concessions," Cross added.
KBC Peel Hunt raised its investment rating on the stock to "reduce" from "sell" following the announcement, but added that it still considers the shares overvalued.
"The deal is unlikely to be immediately accretive to value but ought to be additive to earnings and cash flow. The deal is likely to be well received by the market as it makes Dana a better rounded company," KBC analyst Tony Alves said in a note.
Under the deal, Dana will receive around $67 million in working capital in Devon Egypt from the effective date of January 1, and will pay the net consideration of some $308 in cash via a newly arranged banking facility.
Devon Energy's business spans the Gulf of Suez and Western Desert oil regions, and Dana said they would be a good strategic fit with its existing assets in the Nile Delta and Gulf of Suez.
BajaeNergyBLOGDana said the deal comprises interests in eight production-sharing contracts with 13 producing fields, adding around 12,500 barrels of oil per day to Dana's output.
"This deal will deliver a significant reserves and production growth step for Dana and strategically, the acquisition fits closely with our previous Egyptian transactions," chief executive Tom Cross said in a statement.
"The new portfolio contains a good balance of producing oil fields with numerous attractive drilling opportunities, both on existing fields and within large exploration concessions," Cross added.
KBC Peel Hunt raised its investment rating on the stock to "reduce" from "sell" following the announcement, but added that it still considers the shares overvalued.
"The deal is unlikely to be immediately accretive to value but ought to be additive to earnings and cash flow. The deal is likely to be well received by the market as it makes Dana a better rounded company," KBC analyst Tony Alves said in a note.
Under the deal, Dana will receive around $67 million in working capital in Devon Egypt from the effective date of January 1, and will pay the net consideration of some $308 in cash via a newly arranged banking facility.
Devon Energy's business spans the Gulf of Suez and Western Desert oil regions, and Dana said they would be a good strategic fit with its existing assets in the Nile Delta and Gulf of Suez.
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