Thought I should check what happened to Dominion Oct 13,...

Thought I should check what happened to Dominion Oct 13, 2011

Ophir Energy Plc, a U.K.-listed oil explorer focused on Africa, agreed to buy Dominion Petroleum Ltd. (DPL) for 118 million pounds ($186 million) in stock to expand in Kenya and Tanzania.

The offer of 0.0244 new Ophir shares for each Dominion share represents a premium of 64.2 percent to the target’s closing share price yesterday, London-based Ophir said today in a statement.

Dominion had dropped 40 percent this year in London trading as of yesterday after the company tried to sell new shares to raise money for drilling. Energy companies with strong balance sheets are taking advantage of falling share prices to snap up cash-hungry explorers. Last week, Premier Oil Plc bought North Sea explorer EnCore Oil Plc for $340 million.

“Dominion failed to refinance early in the summer,” Ophir’s Managing Director Nick Cooper said in a phone interview. “That put them under pressure and there’s a fair amount of opportunism in the transaction.”

Dominion rose 51 percent to 5.45 pence in London. Ophir dropped 2.7 percent to 235.7 pence.

The offer reflects the “upside potential” seen in East Africa as well as the gap in valuations between the stock market and the industry, according to Richard Griffith, a London-based analyst at Evolution Securities Ltd.