Valiant Petroleum Jumps in London on Plan to Study Breakup

Valiant Petroleum Plc, a U.K. oil explorer operating in the North Sea, rose in London trading after starting a strategic review that may see it sold or broken up to boost returns for shareholders.

Valiant climbed 4.4 percent to 480 pence. The board has hired Morgan Stanley to examine its options, Woking, England-based Valiant said today in a statement after reporting a first-half loss. The review will “maximize the value generated from the existing asset base and cash generated from production,” it said.

While the world’s biggest oil producers such as Exxon Mobil Corp. and BP Plc have sold North Sea operations in recent years, smaller companies are working to extend the life of fields and add assets. Cairn Energy Plc bought Agora Oil & Gas AS and Nautical Petroleum Plc this year, and EnQuest Plc said in August it will seek acquisitions after making six in the first half.

“The share price is significantly below its intrinsic value,” Valiant Chief Executive Officer Peter Buchanan said in a telephone interview. “There’s a range and type of company that may be interested in merging, and we hope that by going public, we’ll talk to companies we otherwise wouldn’t have thought of.”

Valiant, which pumps 7,453 barrels of oil equivalent a day, said its production, development and exploration programs are fully funded through next year. The review is part of planning for 2014 to 2016, the company said.

The explorer reported a first-half net loss of $29.9 million, compared with net income of $32.1 million a year earlier, according to a separate statement today.

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