The North Sea focussed company, in a statement, noted that it rejected approaches in early September and more recently.
An improved approach from IOG dated September 25 proposed an all share merger and was pitched at a discount of more than 10% of Deltic’s share price.
Deltic noted that the improved proposal included a contingent value that could potentially accrue to Deltic shareholders subject to project milestones for the Pensacola and Selene prospects, but, the maximum was capped at only £2mln which it notes is the equivalent of 0.14p per share.
“The board therefore decided that the amended proposed merger was not in the best interests of Deltic shareholders and it should therefore be rejected,”
It added: “IOG's announcement on 11 September 2020 is the second time a company has made an announcement regarding a possible offer for company in recent months and in both cases the Board has concluded the offers have materially undervalued the company.
“During this latest offer period, the company had discussions with certain of its key shareholders who expressed their continued support for the company.
“The company continues to focus on developing its recently expanded portfolio of assets and strengthening its strategic position in the Southern North Sea gas basin.”
Deltic noted that its exploration partnership with Shell remains on-track and committed to meeting the licence terms for the Pensacola prospect, which means drilling in the second half of 2021.
“The company also recently reported a significant upgrade to the prospectivity and a reduction in risk associated with the Selene Prospect and is focussed on recoverable volumes, economics and well design work required to support the well investment decision, with the well expected to be drilled in 2022,” Deltic added.
“Importantly, the company remains fully funded for the drilling of these two wells with Shell, with success on either being transformational for the company.”