Faroe Petroleum announced today it has conditionally agreed to acquire a package of interests in producing oil & gas assets in Norway from DONG E&P Norge.
The deal was valued at US$70.2 million (£52.15 million) and is expected to be completed by the end of 2016.
“We are delighted to announce the acquisition of these high-quality assets in the Norwegian North Sea. The acquisition of these producing fields creates a new strategic hub for Faroe, centred around the Ula platform, in one of our core areas offshore Norway,” Faroe Petroleum Chief Executive Officer, Graham Stewart, said.
Faroe Acquires DONG North Sea Assets
The acquisition comprises five producing oil and gas fields in the Norwegian North Sea.
This includes the Ula field, where Faroe holds a 20% working interest, as well as two tie-back fields to Ula – Tambar (45%) and Tambar East Unit (37.8%).
As well as this, it includes Oselvar (55%) and the Trym gas field (50%).
According to estimates, the acquisition will add 2P reserves of 19.8 million barrels of oil equivalent (boe) and provide an additional 8,000 boe per day (boepd) of production in 2016.
According to the company director, the acquisition represents a significant value-enhancing opportunity for the company.
“As well as the strategic nature of this deal, the acquired assets will have a material impact on production, reserves, cash flow and debt capacity,” Graham explained.
Faroe to Raise £60.8m to Fund Acquisition
Faroe has reviewed various opportunities, the CEO added, and determined that this portfolio “provides the most strategic sense”, “delivering strategies and upside potential”.
The company also announced it is to raise approximately £60.8 million to fund the acquisition of the DONG assets.
“The proposed placing also announced today will ensure we continue to take advantage of the growth potential within the portfolio in the most capital efficient manner; taking advantage of exploration opportunities and progressing our development projects while maintaining balance sheet strength and flexibility; delivering our goal of becoming a self-sustaining full cycle E&P company”, the CEO explained.