DNO Buys into Faroe Petroleum (Update: Wants More)

Norwegian independent DNO said April 4 it has agreed to acquire Israeli group Delek's 15.37% stake in UK-listed Faroe Petroleum for some £70.4mn ($99mn).

At 4.37pm British Summer Time (BST) that day, DNO said it had engaged Pareto Securities AS to acquire up to 10% more equity in Faroe, reserving the right to close its offer at any time, but no later than 7am BST April 5 2018. If fully exercised, it could increase DNO's equity interest in Faroe to over 25%.

DNO and Det Norske were originally the same company. The latter last year became part of new Norwegian independent Aker BP, with DNO no longer a shareholder.

After a six-year period when DNO's main focus was on Iraqi Kurdistan, it re-entered the North Sea upstream sector in May 2017 through its acquisition of Norway-based privately-owned explorer Origo.

Following the APA 2017 licensing round, DNO says it now holds interests in 19 exploration licenses offshore Norway and the UK. It now says it "will pursue additional strategic investments and partnerships with established North Sea players."  DNO said it has now decided to build a long term strategic shareholding in Faroe Petroleum and to support its management's growth-focused North Sea strategy. 

Delek said the cash sum paid by DNO for the 15.37% stake was new shekels 350mn (some £70.4mn) and that its net gain on the divestment was new shekels 116mn.

Faroe had good news April 4: it is a 15% partner in a double gas/condensate discovery in the Norwegian Sea operated by OMV.