14th Jul 2016 16:10
LONDON (Alliance News) - Faroe Petroleum PLC on Thursday said it has struck a deal to acquire a package of oil and gas assets from DONG E&P Norge AS and will launch a placing to fund the deal.
Faroe has agreed to pay USD70.2 million to acquire the assets from DONG, which cover five producing oil and gas fields in the Norwegian North Sea. This covers a 20% working interest in the Ula field, a 45% working interest in the Tambar field, 37.8% interest in Tambar East Unit, 55% interest in Oselvar and 50% interest in the Trym field.
Faroe said the acquisition will add around 19.8 million barrels of oil equivalent to its asset base and will add 8,000 boepd of production in 2016, nearly doubling its total production for the year from current estimates. The company said production in the five months to the end of May averaged 9,500 boepd.
To fund the deal Faroe said it will raise GBP60.8 million via a placing, plus an open offer through which it will seek to raise another EUR5.0 million. The funds will be raised through an accelerated bookbuilding which will begin immediately, Faroe said.
In the event the acquisition does not complete, Faroe said it will use the proceeds of the placing to fund other acquisitions.
It added the deal will allow it to process its Brasse discovery towards production.
"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, centered around the Ula platform, in one of our core areas offshore Norway. 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," said Faroe Chief Executive Graham Stewart.
Shares in Faroe closed 0.5% lower at 80.09 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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