DNO makes US$214 million offer to buy Calvalley Petroleum

CalvalleyNorwegian oil firm DNO made an unsolicited US$214 million all-cash offer to acquire Canada’s Calvalley Petroleum for US$2.25 per share

Calvalley’s stock jumped 80 per cent on news of the offer. DNO, which produces about 42,000 barrels of oil per day from operations in the Middle East and North Africa, had stated it would take its bid directly to Calvalley’s shareholders because the management had ignored its attempts to negotiate directly.

Calvalley said it had first received an offer from DNO in late May, which it branded “markedly inadequate”. The offer “failed to properly reflect Calvalley's working capital and the core value inherent in the company”, noted a statement by Calvalley.

Calvalley holds a 50 per cent interest in the 2,234 sq km Block 9 in Yemen’s Masila Basin. The other 50 per cent is split between Reliance Industries of India and Yemen-based Hoodoil Ltd.

Calgary-based Calvalley’s working interest share of production volumes before royalties and taxes averaged a record 3,231 barrels per day in the fourth quarter 2011, 49 per cent up on 2,167 barrels per day for the fourth quarter of 2010.

The company has 229 million barrels of booked proven and probable reserves.

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