London Stock Exchange-listed Dragon Oil which has its headquarters in Dubai has confirmed in a statement that it is in the preliminary stages of exploring a possible offer for all of the issued and to be issued share capital of Bowleven, an Edinburgh oil and gas explorer.
"This announcement does not constitute an announcement of a firm intention to make an offer. Dragon Oil would like to emphasise that there can be no certainty that any offer will ultimately be made or the terms or timing on which any such offer would be made," the statement said.
Dragon Oil is now required, by 5pm of March 16 to either announce a firm intention to make an offer for the company or announce that it does not intend to make an offer.
Robin Mills, head of consulting at Dubai-based Manaar Energy, told Gulf News: "Dragon Oil has been exploring options for diversifying away from its main asset in Turkmenistan for several years, including its entry into exploration in Tunisia. Dragon needs to deploy its large cash reserves. Management has previously indicated an interest in West Africa, and Bowleven seems like a good fit given Dragon's expertise in shallow-water field developments."