Faroe to Buy Dong Assets, Raise Capital
UK-listed independent Faroe Petroleum said July 14 it has conditionally agreed to pay Denmark's Dong Energy $70.2mn for a package of five Norwegian oil and gas producing assets, with a target date of end-2016 for completion. It also plans to raise funds for this acquisition, and to accelerate a recent discovery.
They are a 20% interest in the BP-operated Ula field; two tie-backs to Ula namely Tambar (45%) and Tambar East Unit (37.8%); Oselvar 55% and a 50% interest in the Trym gas field. It is estimated the assets will add 2P reserves of 19.8mn barrels of oil equivalent.
Faroe estimates the acquisition will provide an additional 8,000 boe/d of production in 2016 and to increase its average production to between 15,000 and 17,000 boe/d for the year to 31 December 2016 -- roughly 60% oil and 40% gas.
Faroe CEO Graham Stewart (image credit: fp.fo)
Faroe also said it plans to make a share placement with certain institutional investors and with Faroe directors to raise gross proceeds of some £60.8 million to fund the acquisition and to accelerate Faroe's recent Brasse discovery towards development sanction. On July 11, it estimated the recent discovery's gross recoverable hydrocarbons at 28-54mn barrels of oil and 89-158bn ft³ gas (43-80mn boe in aggregate).