15 Jul Faroe Petroleum signs $70m North Sea deal
Independent oil company Faroe Petroleum (LSE:FPM) has purchased five Norwegian oil and gas fields for US$70.2 million from DONG Energy in a bid to capitalise on North Sea opportunities during the market downturn.
Faroe has avoided falling into debt after the 2014 oil market crash and has been looking for bargain assets while oil market prices have remained quiet.
The firm said it will add to its $75 million cash pile through a $60.8 million fundraising drive which it will use to finalise the purchase while fast-tracking work on its largest ever oil discovery announced earlier this week.
The successful evaluation of the Brasse field in Norwegian waters, advanced Faroe’s share price almost 20p higher in a week to over 80p a share.
Graham Stewart, CEO of Faroe Petroleum said the firm could make further acquisitions later this year as the company looks to extend its competitive advantage against its heavily indebted North Sea competitors.
“The market continues to be in favour of companies like ours, and there aren’t many of us, so there may be scope for more acquisitions,” said Stewart. “We have reviewed a significant amount of opportunities in the lead up to this, and as a pre-qualified operator in Norway, this portfolio of assets provides the most strategic sense for us, delivering synergies and upside potential from our existing portfolio.”
Faroe focuses specifically on the UK and Norwegian North Sea and says the super-mature basin can still offer attractive, low-cost reserves for smaller oil companies.