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Suncor's head office in Calgary. (TODD KOROL)
Suncor's head office in Calgary. (TODD KOROL)

Dana eyes more Suncor assets Add to ...

Oil explorer Dana Petroleum, which received a $2.6-billion bid approach from Korea National Oil Corp (KNOC) in June, is in advanced talks to buy U.K .North Sea fields from Canada's Suncor Energy , sources close to the matter said on Tuesday.

Suncor put stakes in a number of assets, including fields in the Guillemot Area, the Scott and Telford Area and exploration acreage, on the market earlier in the year, after last November saying it planned to sell up to $4-billion of assets in 2010.

A deal between Dana and Suncor could be announced soon, the two sources said.

Dana, which rebuffed the Korean approach, has hinted in the past month that it is in talks about a major acquisition and dealers said the Suncor talks were probably the activities to which Dana was referring.

Dana said it had told Korea National Oil Corp, about "significant, well advanced, non-public and valuable," business development activities, in the hope this could prompt KNOC to increase its indicative £1.67-billion ($2.61-billion) bid.

KNOC responded by saying the information would not encourage the state-controlled company to up its bid as Dana had a track record of paying a full price for acquisitions.

However, dealers said the fact KNOC had inside information about Dana meant it was unable to buy Dana shares in the open market, where they were selling for over a pound below KNOC's 1,800 pence indicative bid.

One hedge fund manager said if the Suncor talks were the deal about which Dana had informed KNOC, that the breaking of news about the talks could enable KNOC to buy up Dana shares.

If KNOC chose to do this, it raised the prospect that it could be successful in making a creeping or hostile bid for the explorer, which also has assets in Egypt.

However, another hedge fund manager, who is also long Dana shares, said KNOC could try options to convince Dana management to come to the table, before buying up shares in the market.

"It would not be a very elegant solution. There are other things they should do first," he said Dana and KNOC declined to comment.

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