Placing to raise funds

Faroe Petroleum swoops for North Sea assets in $70m deal

Graham Stewart company picFaroe Petroleum, the Aberdeen oil and gas explorer, has acquired five fields in the Norwegian North Sea in a deal worth $70.2 million.

The seller is DONG E&P Norge and the price will met through a placing of shares which will raise $80m.

The company estimates the acquisition will increase the group’s aggregate average production to between 15,000 and 17,000 boepd for the year to 31 December.

Graham Stewart, chief executive, said: “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. 

“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.

“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.”

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