Dragon Oil (LON:DGO) shares went higher as it confirmed it had received an approach from Emirates National Oil Company.
"There can be no certainty that any firm offer for the company will be made nor as to the terms on which any firm offer might be made, the firm pointed out in a brief statement this afternoon.
Continued development drilling last year drove a 4% increase in revenue at Dragon, despite falling oil prices in the second half.
The company reported revenues of US$1.09bn for the 12 months to December 31, compared to US$1.04bn in the prior year.
Operating profit reduced 16% to US$578mln; however, a US$160mln tax credit meant net profit actually grew 27% to US$650mln.
Shares today advanced 9.16% to 584p.