Aidan Heavey, chief executive of Tullow Oil, said his company was not in the running to buy African oil producer PanOcean Energy because the current oil price would make it too expensive.
His comments follow media reports over the weekend that Tullow may be interested in PanOcean Energy, a Canadian-listed group that has appointed advisers to look at a sale.
Tullow has in the past said it would be interested in any asset in West Africa. Mr Heavey said yesterday that while this remained the case, the current oil price meant that any such acquisitions were out of the company's reach. "For the time being we are concentrating on organic growth," he said, adding that the group had in the past looked at PanOcean.
The company is focused on Gabon, where it has been operating since 1995. It currently produces about 9,300 barrels of light crude a day from four fields.
Tullow has interests in 15 licences in Gabon, including eight producing fields, and is known to be keen to expand in that area.
However, one Dublin analyst in a note to investors said that Tullow would struggle to raise the necessary funds, predicting that even with the inclusion of unused debt capacity, it would only reach half the estimated $1.3 billion (€1 billion) value of PanOcean.
Oil prices reached new records again yesterday, with Brent North Sea crude for September delivery touching $78.18 a barrel in electronic trading. Concern over violence in the Middle East is fuelling the ongoing gains.
