The Motley Fool

Will Genel Energy PLC, Ophir Energy Plc & Dragon Oil plc Be Sold?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Royal Dutch Shell‘s £47bn offer for BG Group is the biggest deal yet to emerge from the current oil sector slump, but it won’t be the last.

Companies that will attract bids will have depressed share prices and high-quality assets, which the majors can use to replenish their reserves at a lower cost than through exploration.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

In my view, three UK-listed companies that are definitely in play are Genel Energy (LSE: GENL), Ophir Energy (LSE:OPHR) and Dragon Oil (LSE: DGO) — which has already received a bid, but may resist — as I’ll explain below.

Genel Energy

Genel’s progress in Kurdistan has been impressive. Oil production rose by 58% to 69,000 barrels per day in 2014, and the company is about to begin exploiting its sizeable gas assets.

Unlike Gulf Keystone Petroleum, Genel has a strong balance sheet, with ample cash and access to cheap debt. This will protect it from an opportunistic low-ball bid.

In a Bloomberg interview last week, Genel boss Tony Hayward said that the firm would either continue to grow or receive an offer that was too good to refuse — in his view, both options are “equally likely”.

Genel shares have fallen by more than 30% over the last six months, and remain a buy, in my view.

Dragon Oil

Dragon is a special case: its majority shareholder is the Emirates National Oil Company (ENOC), which effectively blocks takeover bids from other firms.

ENOC recently approached Dragon with a possible takeover offer, which you might think would be a done deal. However, this will require the approval of the firm’s other shareholders, which may not be forthcoming.

A previous attempt by ENOC to take control of Dragon in 2009 failed, reportedly because Scottish investment group Baillie Gifford, which has a 7% stake in Dragon, opposed the deal.

Ophir Energy

Most of Ophir’s biggest gas discoveries were made in partnership with BG Group. The firm’s offshore Tanzania gas fields contain more than 17 trillion cubic feet (TCF) of gas, and it has other significant gas assets elsewhere.

Ophir’s recent acquisition of Asian oil and gas producer Salamander Energy means that the firm now has regular revenues and can afford to wait for the market to recover — or for a strong bid to emerge. Given the global scale of its gas assets, I believe this is a near-certainty.

Today’s best buy?

Although each of these companies has a good chance of receiving a bid in the next year, buying shares in the hope of a takeover bid is a risky strategy.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Roland Head has a long position in Genel Energy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.