Dublin and London-listed oil explorer Dragon Oil has abandoned plans to make an offer for Dublin-listed Algeria-focused oil producer Petroceltic.

In October, Dragon confirmed that it was poised to make a takeover offer for Petroceltic, valuing the company at nearly £500m.

Dragon Oil's main producing assets are in Turkmenistan. At the time, Petroceltic had that, subject to consultation with its shareholders, it would be willing to recommend an offer at 230 pence sterling per share.

In a statement this morning, Dragon said that “in the light of prevailing market conditions” it no longer intends to make an offer for Petroceltic.

The statement said Dragon reserved the right to set aside the statement within 12 months after the date of this announcement.

Petroceltic issued a statement saying it noted Dragon’s statement. 

Shares in Petroceltic closed sharply lower in Dublin following the news, shedding 43.5% of their value by the end of the day.

Donegal Oil shares closed slightly lower in Dublin, meanwhile.