CALGARY, Alberta (Reuters) - Shares in Pearl Exploration
and Production Ltd
A Petrobank executive dismissed speculation that his firm was the target.
ONGC Videsh, the state-controlled company's foreign investment arm, is in talks to buy a Canadian firm that has Alberta oil sands assets as well as production sharing contracts in another country, the Economic Times reported.
The report, citing unnamed sources, did not identify the target firm but said it was interlisted on Canada's TSX Venture Exchange and the Stockholm Stock Exchange.
Pearl Exploration, one of several Lundin family holdings, rose 14 Canadian cents, or 6 percent, to C$2.49 after earlier touching C$2.68 on TSX Venture with about 2.3 million shares changing hands, almost four times the three-month average volume.
The company had a market value of about C$445 million on Friday ($450 million).
Petrobank, a much larger player developing a unique oil sands recovery process for an Alberta project as well as acreage in Colombia through a subsidiary, jumped C$3.20, or 5.8 percent, to C$58.66 on the Toronto Stock Exchange. Its market capitalization on Friday totaled C$4.6 billion.
Gregg Smith, vice president of Petrobank's Canadian business unit, said it was unlikely his company would be the target, given the information that ONGC has detailed.
As well, his company is withdrawing its listing from the Oslo stock exchange.
"It would be a stretch for it to be Petrobank considering we're not listed on the Venture Exchange or the Stockholm exchange," he said.
Pearl is listed on the Stockholm exchange. Company officials could not be reached for comment.
Some investment-industry sources said they had heard the speculation about a potential takeover by ONGC.
ONGC has been shopping for oil sands assets in Canada for more than two years, and in January its chairman told Reuters that it was still in the hunt. The company has planned to invest more than $1 billion.
It is among several foreign energy concerns that have targeted Alberta's oil sands -- the largest crude deposits outside the Middle East -- for major new projects.
"Today it is not a curiosity. It is not an interest. It is one of the focus areas of our investment," Chairman R.S. Sharma said in January in Calgary.
The Economic Times said ONGC's talks were code-named "Project Crystal" and that the company aimed to take over all of the equity for an undisclosed sum.
It said ONGC had yet to begin due diligence.
($1=0.99 Canadian)
(Reporting by Jeffrey Jones and Scott Haggett; editing by Peter Galloway and Bernadette Baum)
© Reuters Limited. All Rights Reserved.
Reproduction or redistribution of Reuters content, including framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
