<article><p>Dubai-based Dragon Oil has pulled out of making an offer for London-listed independent Petroceltic, citing uncertainty in the oil market and lowering oil prices.</p><p>Dragon Oil confirmed to Petroceltic in July that it was in a position to make an offer, subject to certain pre-conditions. But Dragon said on 30 November that it wished to withdraw its proposed offer. </p><p>Dragon Oil completed an extensive confirmatory due diligence exercise and submitted to the board of Petroceltic proposed offer terms of 230p/share in cash in October. But the price of oil has fallen further since then,with a marked slump since last week's Opec meeting. This has hit Petroceltic's asset values. Front month Brent on Ice was at almost $115/bl in early July and this morning was trading below $70/bl.</p><p>Petroceltic said it was confident of its ongoing strategy as an independent company, and said its flagship Ain Tsila gas and condensate field in Algeria is unlikely to be affected by current oil market price volatility, given oil price forecasts for 2018, when the company expects it to come on stream. The majority of Petroceltic's current production is also sold at a fixed price in Egypt, so is protected from any short-term price volatility. </p><p>Petroceltic's production is currently confined to Egypt and Bulgaria. The company has a 38pc stake in the Ain Tsila field in Algeria, and holds exploration acreage in Romania, Italy, Greece and the Kurdish region of northern Iraq.</p><p>Cash-rich but conservative Dragon has long said that it wants to expand its activities beyond its Cheleken field cash cow in Turkmenistan but has consistently failed to do so.</p><p>et/ts</p><p> Send comments to <a href="mailto:feedback@argusmedia.com" target="_parent"> feedback@argusmedia.com </a></p><br><br><p> If you would like to review other ArgusMedia.com content options, <u><a href="http://info.argusmedia.com/mailers/News/sectortrial.html?ref=webnews" target="_TOP"> request more information </a></u> about Argus' energy news, data and analysis services. </p><p><i> Copyright © 2014 Argus Media Ltd - <a href="http://www.argusmedia.com/" target="_TOP"> www.ArgusMedia.com </a> - All rights reserved. </i></p></article>
