Bloomberg News

Lundin, Det Norske Tipped as Takeover Candidates by Platou

October 03, 2011

Oct. 3 (Bloomberg) -- Lundin Petroluem AB and Det Norske Oljeselskap ASA were cited as takeover targets by RS Platou Markets AS following a recent oil discovery that ranks among Norway’s five biggest offshore finds.

Lundin was raised to “Buy” from “Neutral” with a target price of 145 kronor, while Det Norske’s share-price target was increased to 70 kroner at Platou. Lundin gained 5.2 percent to 123.70 kronor in Stockholm trading after earlier rising to a record 124.50 kronor. Det Norske fell 3 percent after jumping 22 percent on Sept. 30.

Last week, Lundin raised its estimate of recoverable resources for production license 501 at the North Sea Avaldsnes prospect to 800 million to 1.8 billion barrels of oil.

Lundin is a “very attractive takeover candidate for larger companies eager to get a strong foothold on the prolific and fiscally attractive Norwegian Continental Shelf,” Platou analysts wrote in a note.

The results from Statoil ASA’s discovery well at Aldous Major South were used to update the estimate. Aldous Major South and Avaldsnes are part of Norway’s biggest discovery in more than 20 years.

The combined oil structure is now estimated to hold 1.2 billion to 2.6 billion barrels of recoverable oil equivalent, compared with a previous estimate of 500 million to 1.2 billion barrels, Lundin said. Det Norske has a 20 percent interest in the Aldous Major South find.

Det Norske is in “prime position in what appears to become an NCS legacy oil field is too attractive to ignore for larger players” according to Platou. “We regard a bid for the whole company to be more likely than ever.”

--Editors: Stephen Cunningham, Jonas Bergman.

To contact the reporter on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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