PETRO-Canada has bought a 29.9% stake in the Buzzard field for $860m ((pounds) 478m) in a deal that increases the likelihood of a bidder swooping for Edinburgh Oil & Gas and its 5% holding in the giant North Sea discovery.
After announcing the purchase of Intrepid Energy's interests in Buzzard yesterday Petro-Canada signalled its appetite to acquire a bigger holding in the field, which analysts said could interest producers on both sides of the Atlantic.
However, although the Petro-Canada deal places a valuation of around (pounds) 78m on Edinburgh Oil & Gas's Buzzard stake, Alf Bissett, managing director, reiterated his determination to maintain the company's independence and hang on to its biggest asset.
Rather than settling for a quick buck and possibly missing out on production or exploration upside in future, Bissett believes shareholders including himself would do better by staying in Buzzard for the long haul.
The Petro-Canada purchase gave Edinburgh Oil confidence Buzzard was valuable enough to justify spending heavily on its development in the expectation it would support improved earnings and continuing exploration work extending years into the future.
''I would like to see us changing the trend we have seen in Scotland and stay in to add more value,'' said Bissett.
While Edinburgh Oil & Gas's share price edged up 2p to 168p following confirmation that Petro-Canada had won the auction for the Intrepid stake, analysts said the deal would have a dramatic impact on the Scottish firm's valuation.
One analyst, who asked not to be named, said that as well as UK independents, several middle-ranking US oil and gas firms were keen to acquire assets of the size of Buzzard - the biggest North Sea discovery in more than a decade with around 1.2 billion barrels of oil estimated to be in place.
In view of the price Petro-Canada paid for London-
based Intrepid's interest in the field, Edinburgh Oil & Gas's stake could be worth 197p per share.
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