Tullow Oil may bid for the African exploration assets of US group Devon Energy, a move that would significantly increase the group's producing assets in the region.
Tom Hickey, Tullow's finance director, said yesterday there was no question that the group was interested in the assets, which were "practically in Tullow's back yard", but the issue would be price.
Analysts are expecting the assets, which include the equivalent of 90 million barrels of proved oil reserves, to go for anything between $1 billion (€772 million) and $2 billion.
Following the acquisition of Energy Africa and Hardman Resources, Tullow has significant assets in Africa, though they are mainly at the development or exploration stages. Analysts believe the acquisition of Devon Energy's assets would be a good fit with the group's existing portfolio.
There is also significant overlap in a geographical sense. The assets being sold by Devon Energy include an interest in the Exxon-operated Zafiro field in Equatorial Guinea and several other producing properties in Gabon and Côte d'Ivoire, all areas with which Tullow is familiar.
In total, Devon owns interests in 16 blocks in various stages of production, exploration and appraisal. Tullow last month announced the start of crude oil production from the Okume complex, offshore Equatorial Guinea, and the acquisition of a package of assets from the Gabonese government. It is due to release a trading update tomorrow.
