Dragon Oil pulls the plug on Petroceltic takeover

Ireland-based oil producer Dragon Oil has decided not to proceed with its proposed takeover of sector peer Petroceltic due to weak market conditions.

"Dragon Oil now confirms that, in the light of prevailing market conditions, it no longer intends to make an offer for Petroceltic," the company said in a statement on Monday.

On October 6, the two firms had announced they had opened negotiations for a proposed takeover, which would have valued Petroceltic at 230p per share.

In a separate statement, Petroceltic said that its flagship gas condensate project in Algeria was unlikely to be affected by weak oil prices.

Dragon Oil's shares were broadly flat on Monday morning, but Petroceltic's stock plunged 24% in early deals.