Valiant Petroleum considers sale, shares jump
(Reuters) - British oil and gas company Valiant Petroleum Plc VPP.L said it is considering selling itself, in a surprise announcement that pushed its stock up 10 percent.
The company, which has had dismal exploration success this year, said it was considering a range of strategic options that also included farm-in agreements and asset sales.
Small oil and gas companies like Valiant have persisted with operations in the North Sea in hope for big discoveries despite declining production levels in the region, but the announcement still came as a surprise.
"I don't think there was an expectation in the market, but they were certainly very cheap, prior to this they were trading significantly beneath our estimates of core NAV," Peel Hunt analyst Werner Riding said.
Enquest Plc (ENQ.L), a larger rival, was among potential suitors, Riding said.
Shares in the North Sea-focused company jumped to 507.7 pence on the London Stock Exchange before easing back to 488.25 pence, a gain of 6 percent.
The company swung to a loss for the first half of the year, on a $76.4 million exploration related write-off. Production during the period fell about 42 percent. However, the company has maintained it full year outlook of 7,000 to 8,500 barrels of oil per day.
Valiant Petroleum, which has development and exploration assets in the United Kingdom and Norway, has a market value of 187 million pounds ($298 million).
Morgan Stanley & Co to has been appointed to assist it with the review of options.
($1 = 0.6284 British pounds)
(Reporting by Karen Rebelo; Editing by Rodney Joyce)