Faroe Petroleum Share Discussion Threads

[rogerlin] 05/12/2018 16:28

Njord A upgrade is very expensive, originally $588 million, now increased due to work to take on Fenja, Faroe are too small a partner to have any say in time or cost overruns and these presented a risk to them.

[jasper2712] 05/12/2018 16:18

I am surprised at this deal as FPM were fully committed to the Njord platform and the problems associated with it. A lot of money in repairs and loss of income arose from these problems but the gain in the long term looked worth it.
Now they have sold out on it - possible as a way of getting rid of the unwanted attentions of DNO. It certainly seems to have been a surprise to them ,reading their response to the deal

I can only hope that this does not turn out to be a short term gain for a long term pain and the FPM board have considered it very carefully

[thedudie] 05/12/2018 13:41

As an asset swap you wouldn't expect it to change value much but it changes the perception that investors had that they were going to have to wait for material production increases.

Maybe also helps bring Agar production closer.

And reduces capital outlay - I would prefer them to use this to bring forward something else rather than returning it to investors and maybe they will.

A 50kbopd company in a few years.

[vikingbhoy] 05/12/2018 13:32

This doesnt seem likely to change the value of Faroe much, as you can see by the market reaction. Faroe will produce a bit more in the very short run and a little less in the short run, but that's about it.

[thedudie] 05/12/2018 13:27

Glossy presentation in the investor briefcase section on the Faroe website

td

[binarypilot] 05/12/2018 13:08

RNS from DNO......



DNO notes the announcement made by Faroe Petroleum today 5th December 2018, regarding a Norwegian Asset Swap with Equinor.



"This is a significant deal for Faroe, and we need to understand it before making a judgement. While Faroe has asserted this is not designed to stop the DNO offer, we need to ask if this is good value for a company seeking growth: to swap out of its high quality, large scale, core growth hub, Njord, operated by the national oil company of Norway, Equinor, and to take on instead mature and declining production assets - in a deal with Equinor itself. That is the test this deal needs to satisfy."

[wbodger] 05/12/2018 12:28

hxxps://www.equinor.com/en/news/2018-12-05-norwegian-sea.html

"We [Equinor] remain operator and majority equity holder in Alve which is produced via Norne, another important part of the Norwegian Sea for us. And we are reducing our exposure to non-core and partner-operated assets" ... ie Vilje (AkerBP), Ringhorne East (Point Resources), Marulk (ENI)

It's a binding deal only subject to approval by the Norwegian authorities.

[thegreatgeraldo] 05/12/2018 12:00

Always ponder what the other side is getting from the deal..... spot of tidying up for Equinor, gets rid of a few small interests & adds to its position in the Njord area..

[wbodger] 05/12/2018 09:52

It looks as if Faroe are giving up Hyme and Snilehorn (Bauge), both good discoveries in acreage they got in the Maria swap but which are shut in until Njord A is reconnected, in return for discoveries/production in the Norwegian North Sea.

FPM are keeping Fenja (Pil&Bue) 7.5%, which will use Njord infrastructure - perhaps Equinor do not know enough about it to include fair value, so it is left out for now. It would make sense to swap it at some point.

Very interesting that FPM become bigger partners in licences with AkerBP (Alve) and with ENI (who control Point Resources). If anyone was going to compete with DNO, those two were at the top of my speculation list. Also Equinor was a possibility but this rules them out.

[hashertu] 05/12/2018 09:16

Red. I agree with your assessment.
What's not to like?
Minimal change in reserves, reduced Capex, monetise the tax and HC at an earlier date.
The sort of thing the company has been doing for years.

[wbodger] 05/12/2018 09:16

Transaction Details: "The Transaction has been under discussion with Equinor for several months and was approved, subject to final documentation, by Faroe's Board of Directors on 23 November 2018."

[bountyhunter] 05/12/2018 08:45

That's probably spot on Red.

[redartbmud] 05/12/2018 08:40

I cannot believe that the BOD could have conjured up such a swap deal, in such short order, just to frustrate an opportunistic bid from DNO.
Yes, they were aware of the longer term DNO history but, given their ongoing execution of the corporate plan to develop the long term growth of the business, I do believe that it is a strategic move along that path.
The fact that it goes some way to frustrate the bid is a positive point.
The BOD must continue to run the business during this period, and the better the outcomes, the better the chance of remaining independent or, at the very least, getting the best possible price for the shareholders, should the 'bid' succeed.

[rogerlin] 05/12/2018 07:58

Pleased to see that Spirit is the operator at Cassidy, Maersk Interceptor is the rig that experienced an accident at Tambar.

KL Sandefjord is going to pre-lay Songesand (Wellesley) suggesting that this is TO Arctic's next destination. After a massive find at Brasse East of course!

[bountyhunter] 05/12/2018 07:54

Also two RNSs for the price of one this morning!

From the second one...

Graham Stewart, CEO, commented:

"I am pleased to announce the spudding of the Cassidy exploration well situated within tie-back distance of the Oda field, which is on track for first oil in H1 2019. Cassidy offers high value upside for the Oda field development as well as potential to unlock further exploration prospectivity to the north of the Oda field."

"Faroe's active exploration programme has delivered two commercial discoveries out of three wells so far this year: Iris Hades in Norway (Faroe's largest discovery to date); and Agar in UK. The programme is continuing over the coming period, with Cassidy and the Brasse East well currently drilling, a further two wells so far committed for drilling in H1 2019, and a steady flow of additional wells being prepared for drilling"

[fntc] 05/12/2018 07:41

Why did they wait 1.5 weeks with the announcement? They claim to have approved it on the Friday before the DNO bid on the Monday. Very strange.

[bountyhunter] 05/12/2018 07:36

Good move by FPM, +7-8k boepd and lower capital expenditure at nil cost, also now targeting 50k medium term.

[binarypilot] 05/12/2018 07:31

plus....OPEC meeting tmrw....

[thedudie] 05/12/2018 07:30

Wonder if that will upset the plans of whoever is accumulating at 1.57...

td

[thedudie] 05/12/2018 07:24

2019 production estimate now 19-22000boepd
Does have a small effect on reserves but brings forward production by about 2 years and reduces capital outlay.

Also appears to be some upside in near drills … how material I am unsure
td

[talkman2] 05/12/2018 07:18

200p minimun

[mirabeau] 05/12/2018 07:17

This news appears to be management seeking to defend itself against DNO's cheeky bid

50k boepd - medium term...

[thedudie] 05/12/2018 07:15

An asset swap with Equinor.
I had expected some sort of asset purchase (after parallels with Ithaca - way before the Deleks bid)… but I must confess a bit surprised at this.

Funny how it was signed off by the board on 23rd Nov....

Opening the way for a capital return of some sort - would prefer they acquired a stake in production somewhere but understand institutions may be applying pressure.

And Cassidy spud.

I am guessing a presentation to come at some point

td

[talkman2] 05/12/2018 07:12

Well , that RNS has well and truly blown DNO’ derisory offer out of the water

[oli12] 04/12/2018 17:13

I agree. DNO must have advisors who have told them they are too low and that they will need to increase - I am sure we will see a revised offer, 175 - I doubt they will offer £2 however maybe starting low was part of the negotiations.