DNO submits offer for Faroe Petroleum

Nov. 26, 2018
DNO is seeking to acquire Faroe Petroleum via a share offer.

Offshore staff

OSLO, NorwayDNO is seeking to acquire Faroe Petroleum via a share offer.

The company already holds 28.22% of Faroe’s issued share capital. Its offer values Faroe at around £607.9 million ($781 million).

DNO executive chairman Bijan Mossavar-Rahmani said: “We firmly believe that Faroe’s assets, the substantial part of which are Norwegian, are better placed in the bosom of DNO, Norway’s oldest independent oil and gas company, currently operating gross production of 125,000 b/d which compares with the 7,500 boe/d of gross production operated by Faroe.

“DNO’s proven and probable reserves were nearly four times those of Faroe’s as reported at 31 Dec. 2017. Whether the offer achieves DNO’s minimum acquisition target or the acquisition of all of Faroe’s shares, we attach great importance to retaining the skills, knowledge, and expertise of Faroe’s operational management and employees.

“We intend to retain Faroe’s Aberdeen head office and each of the other offices.”

Faroe’s board said the offer had been unsolicited and urged its shareholders to take no action.

The company has found gas/condensate with its latest operated exploration well in the Norwegian North Sea, but of doubtful commerciality.

The semisubmersibleTransocean Arctic drilled well 30/6-30 in 125 m (410 ft) water depth in license PL 825, 25 km (15.5 mi) north of the Oseberg field center, and 150 km (93 mi) northwest of Bergen.

According to the Norwegian Petroleum Directorate, the secondary exploration target delivered a total gas/condensate column of around 55 m (180 ft) in the Ness formation. It estimates recoverable resources at 0.4-2.7 MMcmoe.

The rig will next drill appraisal well 31/7-3 S for Faroe in the same area in PL 740.