Cairn Energy agreed today to buy North Sea oil company Nautical Petroleum for £414 million in cash.
This will boost the explorer’s presence outside Greenland, where its exploration wells have been coming up dry. The 450p-a-share deal, Cairn Energy’s second since announcing its change of focus in March, will hand just over £4 million apiece to Nautical’s two founders, chief executive Paul Jennings and commercial director Stephen Jenkins. However, the pair might end up pocketing even more after the market indicated it believes Nautical will receive a higher bid from a rival. Shares in Nautical soared by 162.25p to 460p this morning, comfortably ahead of the price agreed with Cairn.
The business has focused its energies on Greenland in the past two years, but after failing to strike oil it pledged to spend some of its $1.2 billion (£770 million) cash pile on businesses elsewhere that would be oil producing in the near term.
A few weeks later, in April, Cairn bought Agora Oil & Gas, a Norwegian company with oil and gas exploration rights in the UK and Norwegian North Sea, for $450 million.
