Azernews.Az

“Dragon Oil now confirms that, in the light of prevailing market conditions, it no longer intends to make an offer for Petroceltic,” the Dubai-based explorer said in a statement. The company reserves the right to set aside the statement in the next 12 months in accordance with Irish takeover rules, it said.

Petroceltic, based in Dublin, sank 38 percent, the biggest drop since October 2008, to 107.50 pence by 1:09 p.m. in London.

West Texas Intermediate fell below $65 a barrel today after the Organization of Petroleum Exporting Countries decided against cutting supply to support prices last week.

“Dragon is very linked to oil price and we’re probably the opposite extreme,” Petroceltic Chief Executive Officer Brian O’Cathain said in a telephone interview from Dublin. The explorer’s Algerian gas project, due to start output in 2018, won’t be affected by current movements because prices are expected to pick up by then, it said in a statement. The majority of production is sold at fixed gas prices in Egypt, Petroceltic said. It also operates in the Mediterranean Basin and Black Sea.

“We’re always for sale,” O’Cathain said. “As long as the price is right.”

Dragon oil first bid for Petroceltic in October. Slumps in oil price have ushered in bouts of mergers in the industry in the past.

“I would have thought that this transaction would go through. The fact it does not is a positive in my view,” Stephane Foucaud, an analyst at FirstEnergy, said in an e-mail. “The recent oil-equity meltdown could offer Dragon better opportunities than the potential Petroceltic deal,” he said in a note.