Dana Petroleum has agreed to buy rival Petro Canada Netherlands, a wholly owned subsidiary of CanadaÔÇÖs Suncor, for ┬ú270 million, it has been announced.
The deal, which is DanaÔÇÖs biggest acquisition to date, will give the Aberdeen-based oil prospector access to a new area in the Dutch sector of the North Sea, and could boost its production guidance for 2010 by 10 to 12 per cent on an annualised basis.
DanaÔÇÖs output for 2011 is estimated to jump by 8,000 to 9,000 barrels of oil equivalent per day (boepd), representing a 20 to 25 per cent rise on previous guidance. New projects in the Netherlands are expected to boost figures for 2012 by 10,000 to 14,000 boepd.
The deal will lift DanaÔÇÖs proved and probable reserves by an additional 31 million barrels of oil equivalent, or 12 per cent, to 254 million barrels. It also increases the company's total number of producing fields from 36 to 54ÔÇöthis includes 15 new offshore fields and three new onshore fields.
Petro Canada Netherlands has operated interests in eight offshore production and exploration licenses in the Dutch sector of the North Sea. It also has interests in 13 non-operated offshore production and exploration licences, primarily containing natural gas assets, and a small non-operated onshore position in the Netherlands.
Commenting on the acquisition, Tom Cross, chief executive officer of Dana, said: ÔÇ£This transaction represents DanaÔÇÖs fourth international acquisition in the past three years and is the most significant and exciting development in the CompanyÔÇÖs history. It builds upon our portfolio approach to the E&P business and provides a significant production and reserve growth step for the Group.
ÔÇ£In addition, the Acquisition adds considerably to our operating capability in the North Sea, better positioning Dana to capitalise on the operated developments emerging from our own organic portfolio and to pursue further operated opportunities in the future. It also extends our existing UK gas business, providing a European gas context and a first time exposure to gas storage technology and opportunities.ÔÇØ
Suncor, Canada's largest oil and gas company, embarked on a divestment programme following last year's takeover of Petro Canada. The Dana deal will bring the sum of funds raised through the sale of non-core assets to $2.1 billion. Previous deals have included oil and gas assets in the Rocky Mountains, natural gas properties in western Canada and all assets in Trinidad and Tobago. The company plans to sell more natural gas assets in western Canada and the North Sea.
Following the $22 billion merger with Petro Canada, the new Suncor ranked as Canada's largest energy company and North America's fifth biggest. Suncor now plans to focus mainly on Canada's oil sands sector.
Dana currently operates in the North Sea, Norway, Egypt and Morocco. Last year, 81 per cent of its production came from oil, with gas making up the remainder. It employs 108 people.
The sale is expected to complete by the end of the third quarter.
