Directors of Edinburgh-based Melrose highlighted the company's success in reducing debt in the six months to June, a feat they said would allow the company to increase activity in coming months.
While production fell in the first half when profits were flat, the directors believe the company could enjoy significant exploration success on its acreage that could fuel future growth.
They believe the £165 milllion recommended deal with Petroceltic will open up new opportunities for Melrose shareholders. It will own 46% of the enlarged Petroceltic, which will have headquarters in Ireland. Petroceltic's Brian O'Cathain will be chief executive.
Assuming the deal is completed, the enlarged Petroceltic will combine the company's interests in Algeria, Kurdistan and Italy with Melrose's assets in areas ranging from France to Egypt.
Following the announcement of the deal last week, Oriel Securities told clients: "We do not see this as a particularly good deal for Melrose shareholders."
Experts at the brokerage claimed the deal appeared to undervalue Melrose by around 20%, based on their calculation of its potential net asset value.
However, they said Melrose's shareholder structure made it unlikely the deal would be rejected.
Melrose's executive chairman Robert Adair, who is in line to be non-executive chairman at the enlarged Petrocetic, owns around 51% of the shares in Melrose.
Mr Adair said the "potentially transformational" deal with Petroceltic would create a significant combined company with a balanced portfolio and the scale to compete.
He also said the deal had partially eclipsed the interim results announcement, which reflected a solid financial performance.
The company generated $93m net cash from operations during the period, and repaid $76.5m debt, net of new borrowing. It is on track to meet its strategic objective of reducing gearing from 89% to around 60% during the year.
Melrose made $33m post-tax profit, in line with the first half last year. Shareholders will be offered 17.6 new Petroceltic shares and a dividend of 4.7p for every one held in Melrose.
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