South Korea's KNOC in talks to buy UK's Dana Petroleum

State-owned Korea National Oil Corporation (KNOC) said yesterday that it was in preliminary talks to acquire UK-listed oil explorer Dana Petroleum, as it seeks to increase its oil reserves this year to 300,000 barrels per day.

Shares in Dana jumped 22 per cent to £14.40 in trading yesterday after KNOC confirmed market rumours of the potential acquisition saying, "It is in very preliminary discussions regarding a possible cash offer for the entire issued- and to-be-issued share capital of the company."

But it cautioned that there was no certainty that any offer would ultimately be made.

Although KNOC did not indicate the price it would pay for Dana, analysts surmise that Dana is valued at around £1.5 billion.

Aberdeen, Scotland-based Dana holds exploration and production interests in the UK, the Netherlands, Norway, Egypt, Faroe Islands, Mauritania, Morocco and Senegal. As of 31 December 2008, it had proven and probable oil reserves of 223 million barrels of oil equivalent from 36 oil and gas fields.

Armed with a cash pile of $6.5 billion, Anyang, South Korea-based KNOC has been on the prowl for acquisitions in order to double its production from 130 million barrels a day to 300 million bpd by 2012.

Since 2008, it has acquired US-based Ankor Energy that produces crude oil and gas from its five oil fields in the Gulf of Mexico, Savia Peru, the largest private oil production and exploration company in Peru, Canada's Harvest Energy, one of Canada's largest oil producers and refiners and Kazakhstan's Sumbe, which owns two oilfields in western Kazakhstan.