December 07, 2018

Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK,  announced it has signed a binding agreement with Equinor Energy AS (a wholly owned subsidiary of Equinor to swap its interests in the Njord, Hyme redevelopment and Bauge development assets (the “Divested Assets”) in return for interests in four production assets on the Norwegian Continental Shelf: Alve, Marulk, Ringhorne East and Vilje on a cashless basis. The Transaction has an effective date of 1 January 2019 and is subject only to consent from the Norwegian authorities.
Strategic Highlights
• Accelerates targeted production growth adding 7-8,000 boepd in 2019;
• Provides better portfolio balance between production and development with no material impact on reserves;
• Expands footprint through two new core areas (Alvheim and Norne), with near-term catalysts including a firm dual-target exploration well in the Alve licence and an approved development well on Marulk in 2019;
• Significantly reduces Faroe’s capital expenditure by eliminating expenditure on the Divested Assets from 2019;
• Materially reduces Faroe’s operating expenditure per barrel of oil equivalent;
• Creates material tax synergies by accelerating Faroe’s utilisation of its Norwegian tax loss position; and
• Intention to give careful consideration to the optimal mix of reinvestment in the existing portfolio, potential M&A opportunities and returning capital to shareholders following Transaction completion.

(Source: Equinor)