ENOC says it will not keep dividend payments for Dragon Oil shareholders
Published 16/07/2015 | 09:35
Irish-listed oil producer Dragon Oil's largest shareholder Emirates National Oil said it would no longer support payment of dividend to shareholders, stepping up the pressure in its bid to take over the company.
ENOC, which owns 54pc of Dragon Oil, in June offered 750 pence per share to buy out minority shareholders. The deal values Dragon at about £3.7 billion (€5.1bn).
ENOC plans to de-list Dragon Oil from the Irish Stock Exchange if its takeover bid is successful.
Major investors Baillie Gifford and Setanta Asset Management see that offer as inadequate.
ENOC said it expects Dragon Oil, which produces oil from Turkmenistan, to face operational challenges in meeting its long-term target production of 100,000 barrels of oil per day.
ENCO chief executive Saif Al Falasi said: “As we see it, there are operating challenges associated with sustaining production at Dragon Oil’s forecast levels. Mitigating these operating issues will likely require additional investments.
“That’s why I don’t see a need for Dragon Oil to maintain a dividend profile in the near term. These are difficult decisions for any publicly listed company and we see this as another reason for delisting Dragon Oil.”