DONG field interests could double Faroe’s production

Offshore staff

ABERDEEN, UK -- Faroe Petroleum has agreed to conditionally acquire a package of producing fields offshore Norway from DONG E&P Norge for $70.2 million.

The deal should completed by the end of this year.

Additionally, Faroe intends to conduct a placing with certain institutional investors to help raise around £60.8 million ($81 million) to fund the acquisition and to accelerate its recent Brasse discovery towards development sanction.

The acquisition comprises:

Five North Sea producing oil and gas fields: Ula field (20% working interest); two tie-back fields to Ula, namely Tambar (45%) and Tambar East Unit (37.8%); Oselvar (55%); and the Trym gas field (50%).

Consultants LR Senergy estimate that the acquisition will add 19.8 MMboe to Faroe’s reserves, lifting its annual production by 8,000 boe/d to between 15,000 and 17,000 boepd by the end of this year, (roughly 60% liquids and 40% gas)

The estimated 2015 unit opex is $19/boe for the DONG assets.

In the event that all or part of the acquisition does not complete, Faroe intends to use the unapplied net proceeds to fund similar acquisitions.

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...

“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.


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