Norway’s DNO eyes Calvalley Petroleum aquisition

Norwegian oil and gas company DNO International has said that it plans to offer C$215m ($212m) in cash to acquire Canada’s Calvalley Petroleum.

The company will offer C$2.30 for each class A common share of Calvalley, representing a premium of 60% DNO to the CAD 1.43 closing price of Calvalley on the Toronto Stock Exchange on 4 July 2012.

DNO International executive chairman Bijan Mossavar-Rahmani said, “For DNO International, this transaction is complementary to our existing Yemen asset base and fits well with our strategy of continuing to build a balanced portfolio of production, development and exploration assets in the Middle East and North Africa.”

DNO International currently owns working interests in five assets in Yemen, three of which have produced 4,169 barrels of oil per day in the first quarter of 2012 and proved plus probable (2P) reserves of 10.5 million barrels.

Calvalley’s principal assets include a 50% working interest in Block 9 of the Sayun-Masila Basin in Yemen, as well as a 100% interest in the Metema and Gimbi blocks in Ethiopia.

DNO said Calvalley would add production of 1,942 barrels of oil per day and 2P reserves of 29.3 million barrels.

The company first approached Calvalley in late May with the aim of negotiating a transaction to combine the two companies, but failed to reach a deal.

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Image: Calvalley holds a 50% working interest in Block 9 of the Sayun-Masila Basin in Yemen (pictured). Photo: Calvalley Petroleum Inc.