Faroe Petroleum signed a $70 million deal to acquire oil and gas assets in the North Sea from Dong Energy, according to a report by Energy Voice.
The firm said it would soon open a new round of investments in order to fund the purchase and the development of the new Brasse discovery in the Norwegian sector of the same body of water.
The Telegraph reported on Faroe's status as one of the few international energy players that has managed to stay out of debt in the ongoing oil price crisis. The firm has been "on the hunt" for bargain-priced assets during the market downturn, according to the United Kingdom-based publication.
The acquisition would involve five oil and gas fields in Norway's North Sea, namely: a 20 percent stake in the Ula field, a 45 percent working interest in Tambar, a 37.8 percent interest in the Tambar East field, a 55 percent stake in Oselvar and a 50 percent stake in the Trym natural gas field.
In total, Faroe's reserves will increase by 20 million barrels of oil at a rate of 8,000 barrels per day for the remainder of 2016. The company said the cost to produce energy in the fields stood at $19 per barrel in 2015.
Graham Stewart, chief executive of Faroe Petroleum, released a statement framing the deal as the expansion of an existing wing of the company.
"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," Stewart says. "The acquired assets will have a material impact on production, reserves, cash flow and debt capacity."
The CEO also said the company could be making additional purchases in the North Sea in the coming months in order to rival the influence of regional competitors.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More