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Heritage Oil up on talk of Shell making bid

The Times

July 15, 2009

Peter Stiff: Market report

As a former mercenary, Tony Buckingham must have muscled in on plenty of other people’s business and yesterday the word was that someone was planning to do precisely that to him.

Shares in Heritage Oil, of which Mr Buckingham is chief executive and in which he has a 33 per cent stake, soared by more than 11 per cent amid speculation that Royal Dutch Shell may gatecrash its £3.5 billion merger with Genel Energy of Turkey.

The two groups last month agreed a deal to form what would be a FTSE 100 Kurdish-focused oil explorer. Since then, the pair have been doing the rounds in the City and everything is said to be progressing nicely.

However, the deal is far from done and dusted, given that it is non-binding and that there is no break fee.

Traders therefore bought into suggestions that Shell was considering a 700p-a-share offer for Heritage. However, followers of the Anglo-Dutch oil major may have reason to doubt the rumour. Such a deal would probably alienate the Iraqi Government, with which the company hopes to do business, because of political conflict between the Kurdish regional government and officials in Baghdad.

Nevertheless, shares in Heritage rose by 50.2p to 490¼p, while Shell ticked up 4p to £14.69.

TIMES ARTICLE

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