Tap walks away from Arc bid

Tap Oil has walked from its $60 million takeover bid for Arc Energy. Tap told the market the deadline for the acceptance of its scrip offer had passed on Monday with less than one per cent of Arc shareholders accepting the bid.

Arc mounted a spirited defence, basing its rejection on exploration upside at its recent Hovea oil discovery in Western Australia.

Tap Oil managing director, Mr Paul Underwood, said it was disappointing that Arc's defence was based exclusively on the exploration upside that might or might not come to pass.

"We still think we've called it right. There was little benefit to our shareholders in just buying upside," Mr Underwood said.

Despite its hostile bid being rejected, Tap is currently gearing itself for a hectic 16-well drilling program for the second half of the year.