Delek Group completed its deal with Dana Petroleum to gain 13.18% of Faroe Petroleum, expanding the Israeli firm’s North Sea footprint, and making it the majority holder in Faroe.
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Map of Faroe assets, from Faroe. |
According to the terms of the agreement, Delek acquired all of Dana’s shares in Faroe for US$52.3 million (£42.77 million). The deal, aimed to extend Delek’s international activities in the energy field, was completed on 22 December.
“This is another important step in the implementation of Delek Group’s strategy to become an international energy company, with significant activity in the fields of oil and gas exploration and production,” Asaf Bartfeld, Delek Group president and CEO said. “Acquisition of the Faroe shares is synergistic with and complements the purchase of 20% of the shares of Ithaca, which we did about a year ago. Delek Group’s financial strength allows us to identify strategic expansion opportunities, by which we are working to increase the value we provide to Delek Group’s investors.”
Faroe’s portfolio of gas and oil assets includes some 60 drilling, evaluation, development and production licenses for oil and gas in the North Sea, in Norway and the UK, of which Faroe has operatorship.
As of 1 January 2016 resources (P2) stood at 61 MMboe, and following completion of a transaction for the acquisition of additional assets in December 2016, proven resources are expected to increase by 20 MMboe.
In 1H 2016, Faroe produced from the assets it owns 9000 boe/d, and following acquisition of the additional assets mentioned above, the daily production output is expected to grow to between 17,000-18,000 boe/d.
The North Sea-focused oil and gas exploration firm had been working on expanding its business in 2016 by gathering funds, and acquiring assets.
Last week, Faroe entered into deals with two banking facilities that will provide substantial finance to underpin the company’s growth plans. One loan is for $250 million, and the second is for $115 million.
Earlier this month, Faroe and DONG E&P Norge completed the acquisition deal consisting of five Norwegian North Sea oil and gas fields, with Faroe only paying a fraction of the original $70.2 million price tag. Faroe only paid $26.7 million to acquire Ula (20%), Tambar (45%), Tambar East Unit (37.8%), Oselvar (55%) and Trym (50%).
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