British firm Faroe Petroleum, which was subject to a hostile bid by DNO, has agreed a deal that will see it swap oil and gas assets with Norwegian state-owned company, Equinor.
The non-cash deal will enhance Faroe’s output and cash flow while securing Equinor’s stakes in fields located in the Norwegian Sea, which is less mature than the assets it will hand over.
In a statement, Faroe Chief Executive Graham Stewart said: “The increased cash flow, reduction in capital expenditure and reduction in unit operating cost resulting from the transaction will further strengthen our already robust balance sheet.”
He added: “This will enable us to give careful consideration to a potential return of capital to our shareholders, as an additional element in our capital deployment mix.”
On 26th November, Faroe rejected a £608 million bid from DNO, which was considered a significant undervaluation of the company based in Aberdeen.