June 3 (Bloomberg) -- Dana Petroleum Plc, a Scottish explorer focused on Europe and North Africa, says it “isn’t for sale” even as rivals target each other because the company expects to boost market value by finding more oil and gas.

Dana is forecasting output will rise 9 percent this year after jumping 29 percent in 2008, and plans to start production at two new fields in 2009 in addition to the 34 already pumping. Its exploration campaign over the next two years is targeting 1.2 billion barrels of oil equivalent resources.

Oil producers are studying acquisitions after crude prices dropped from last July’s record and the credit crisis created opportunities to snap up cheap assets. Premier Oil Plc this year bought Oilexco North Sea Ltd., while BG Group Plc is completing the takeover of Australia’s Pure Energy Resources Ltd.

“If you get acquired too early, you lose your upside,” Chief Executive Officer Tom Cross said in an interview at his Aberdeen office June 1 following a shareholders’ meeting. “We are drilling 17 wells now, it’s too early.”

Dana itself bought Calgary-based Bow Valley Energy Ltd. for C$219 million ($202 million) in April while Centrica Plc, Britain’s biggest energy supplier, has acquired 24 percent of Dana’s Aberdeen rival Venture Production Plc and has said it may make an offer for the rest.

‘More Predator’

Dana is “more perceived as a predator than a prey,” Emma Ritter, an analyst at Exane BNP Paribas in London, said in a phone interview on June 2. “They are one of the most active U.K. exploration and production companies in terms of asset trading and swapping.”

In 2006, Dana secured assets in the North Sea and Egypt by swapping part of its interest in Mauritania for stakes in the fields with Gaz de France, now GDF Suez SA. Last year, the Scottish explorer exchanged assets with Det Norske Oljeselskap ASA in Norway, part of a series of similar transactions.

Dana shares have risen 32 percent this year, outperforming the 16 percent gain in the 40-member Dow Jones Europe Oil & Gas Index and giving it a market value of 1.19 billion pounds.

The company is working on 22 projects exploring for oil and gas in eight countries, Cross said, and plans to accelerate work in Egypt, where it operates processing a facility used by other companies active in the country.

‘Hungry’ for Oil

“We would like to drill for the next couple of years and we have no interest in selling Dana,” Cross said, since companies don’t need to produce oil to make the best returns. “Sometimes it’s more profitable to sell it in the ground.”

Dana’s strategy is to explore for reserves and then invite large companies, such as Royal Dutch Shell Plc or Exxon Mobil Corp., to jointly develop fields if oil or gas found. That’s different from Venture Production’s business model, which mostly aims to acquire existing resources, Cross said.

Major companies “see us as an exploration team,” Cross said. At the same time, Venture and Dana “are similar as we are hungry for oil.”

Dana increased its proven and probable reserves to 194.1 million barrels of oil equivalent at the end of 2008 from 165.8 million barrels a year earlier, a reserves replacement ratio of about 300 percent.

The company’s investment plan is fully funded this year, Cross said, adding the company has cash and is increasing its banking facility to $400 million, part of which is being used for the Bow Valley purchase. The company is continuing to examine possible acquisitions of assets.

“We are looking for opportunities all the time,” he said, while declining to comment on whether he has received any approaches for the company. “Anyone interested in Dana will be expected to pay a significant premium,” he said.

“At the end of the day it depends on the price” offered, Exane BNP Paribas’s Ritter said.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: June 3, 2009 01:55 EDT