Seafield to recommend £61.3m bid from Dana

Dana Petroleum has made a £54.5 million sterling (£61.3 million) bid for British publicly-quoted group, Seafield Resources. It is being recommended by the Seafield directors and undertakings have been received by shareholders representing more than 50 per cent of Seafield's equity. The offer is 10 new Dana shares for every three Seafield shares. It values each Seafield share at 78.3p, or 16 per cent over the pre-bid middle price. There is a cash alternative of 72p, which is underwritten and represents a premium of 6.7 per cent. The existing shareholders in Seafield will end up with 28.5 per cent of the enlarged group which will be capitalised at almost £200 million. Dana which last year acquired Petroceltic is currently incorporated in Ireland and has its shares quoted in Dublin and London. It intends to transfer its domicile to Britain where its management is already based. However, Dana director, Mr John Craven, said the Dublin share quotation would be retained.

Irrevocable undertakings to accept the offer from Dana have been received from the Seafield directors, National Power, Limpopo Investments and Mr David Keith in respect of 24.6 million Seafield shares, representing 35.4 per cent. In addition, an undertaking to accept has been received from a holder with 14.8 per cent of the equity. Dana said there was a good fit between the two companies in terms of production and earnings profiles. The "enlarged group will have an improved asset balance in terms of exploration versus production, oil versus gas, and geographical location, thereby providing a solid foundation for future growth". Seafield has interests on the British continental shelf, offshore Ireland - it has a 10 per cent interest in a licence covering six blocks in the Porcupine, south of where Statoil is assessing the commerciality of an oil discovery - the Netherlands, Western Australia, Ghana and onshore Syria.

Its current production is from the Victor gas field in the North Sea where it has a 5 per cent stake and from the Kishma oil field in Syria, operated by Tullow Syria Oil, where it has a 10 per cent interest. Production from the Durward and Dauntless fields, in the North Sea, in which Seafield has a 10 per cent interest is scheduled to start shortly. Seafield increased its sales from £6.1 million to £7.6 million last year and profits grew from £1.9 million to £3.1 million sterling. Net assets amounted to £41.2 million.

Dana is developing two oil fields in west Siberia through joint ventures with Russian partners and has a 10 per cent stake in Evikhon, a Russian group with interests in two joint ventures. Dana also has gas royalty income from two fields offshore Ireland and, in joint ventures with Seafield, holds exploration assets offshore west Africa and Western Australia.