Petroceltic

I have just returned from my weekend away and seen the possible offer for Petroceltic from Dragon Oil. I do not cover Dragon as it has a 54% owner in the Emirates National Oil Company and is apart from anything else bid-proof.

As for Petroceltic I have been following them for a long time and written plenty about them this summer. I will write more tomorrow as I have only just seen this and neither Brian or Tom were available to comment when I called earlier.

There are a number of interesting factors in this possible offer and the fact that Worldview have magic-ed something up again is most revealing. It is also fair to say that it is hard to think that ENOC have not already approved of this bid and that it will swiftly become a done deal. The fact that Worldview managed to get two of the totally independent non-executives off the board in the summer will smooth that path….With Worldview and Robert Adair owning so much it is likely to go through and whilst 230p  is hardly a knockout, in this market shareholders are unlikely to complain.

The final point worth making is one I have been banging on a lot about lately, which is that the sector will see more of these bids as share prices continue to fall. Consequently, when they are at a discount to asset values which a number are, the old phrase that it can be cheaper to drill for oil in the stock market than the ground will be proved again, you have been warned.