Norwegian oil firm DNO reported on Thursday a higher-than-expected operating profit in the fourth quarter and said it would hike 2019 spending as it planned to drill a record number of wells.
The Oslo-listed firm, which produces most of its oil in the Kurdistan region of Iraq, in January won a hostile takeover bid for London-based Faroe Petroleum, expanding its foothold in the North Sea.
"The Faroe transaction transforms DNO into a more diversified company with a strong, second leg," DNO's Executive Chairman Bijan Mossavar-Rahmani said in a statement.
"This represents not a pivot away from Kurdistan but a pivot to Norway."
The Faroe acquisition places DNO among the top five oil companies by production licenses held on the Norwegian continental shelf, which includes 22 operated licenses, DNO said.
The company said it would lift capital spending to $220 million in 2019, up from $138 million last year, and plans to raise total spending, including exploration spending, to $420 million, up 40 percent from the last year.
DNO's drilling program includes up to 20 exploration and production wells in Kurdistan, and another five wells in Norway. Including Faroe licenses, DNO plans to participate in up to ten wells in Norway this year, it added.
The company said it would publish pro-forma results and its 2019 investment program for the combined entity later this month and in March.
It would continued to pursue other bolt-on acquisitions in Norway to complement its exploration and development programs, it added.
Earnings before interest and taxes rose to $230 million in the fourth quarter from $25.7 million a year ago, beating a forecast of $68.5 million in a Reuters poll of analysts.
DNO's working interest quarterly production stood at 91,570 barrels of oil equivalent per day (boepd), up from 77,232 boepd in the same quarter a year ago.
($1 = 0.7711 pounds)
(Editing by Gwladys Fouche)