Britain's Faroe Petroleum has agreed to swap oil and gas fields with Norwegian state firm Equinor as it fights a hostile takeover from Norwegian oil and gas operator DNO.
It appears that Faroe in fight-back mode after DNO’s so-called ‘opportunistic’ bid.
The oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK said in a press note that it has signed a binding agreement with Equinor Energy to swap its interests in the Njord, Hyme redevelopment and Bauge development assets in return for interests in four production assets on the Norwegian Continental Shelf: Alve, Marulk, Ringhorne East and Vilje on a cashless basis.
It said the transaction has an effective date of 1 January 2019 and is subject only to consent from the Norwegian authorities. The net impact on production in 2019 is expected to be up to 8,000 barrels of oil equivalent per day (boepd).
According to sources, the move, which is expected to increase Faroe’s output by around 60 per cent in 2019, could bump up its price in the face of DNO’s bid.
DNO noted the announcement made by Faroe Petroleum 5th December 2018, regarding a Norwegian Asset Swap with Equinor.
DNO replied: "This is a significant deal for Faroe, and we need to understand it before making a judgement. While Faroe has asserted this is not designed to stop the DNO offer, we need to ask if this is good value for a company seeking growth: to swap out of its high quality, large scale, core growth hub, Njord, operated by the national oil company of Norway, Equinor, and to take on instead mature and declining production assets - in a deal with Equinor itself. That is the test this deal needs to satisfy."