SOCO says it won't bid for Ophir as it posts rise in 2018 profit

SOCO International said on Wednesday that it will not make an offer for Ophir Energy after its proposal in January was rejected.

The oil and gas company, which has only just revealed that it made a proposal to Ophir, said it has believed for some time that a combination between the two would create "significant and long-term value" for shareholders in both companies.

The group said it tabled a formal proposal to Ophir's board regarding an all-share combination on 17 January, but it was unanimously rejected a few days later.

"In light of Ophir's subsequent announcement of a recommended all cash offer of 55p from PT Medco Energi Global PTE, SOCO believes that a share-based combination with Ophir would currently be challenging to execute and so would represent an unacceptable level of risk for SOCO shareholders," it said.

The announcement came alongside the company’s preliminary 2018 results, which showed a surge in pre-tax profit to $80.1m from $22.7m the year before and a 12% increase in revenue to $175.1m as the result of a higher average realised crude oil price.

President and chief executive Ed Story said: "We remain committed to creating value for our shareholders through a combination of capital growth and capital returns. I am pleased that the board has decided to recommend a 2018 final dividend of 5.5p per share, a 5% increase on 2017.

"In addition, we have repositioned SOCO to support further growth in the wider Middle East and North Africa region, both organically and through additional mergers and acquisitions."

At 1250 GMT, SOCO shares were down 0.2% to 68.35p.