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Equinor, Faroe Petroleum in Norway asset swap

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By Reuters
Equinor, Faroe Petroleum in Norway asset swap
FILE PHOTO: A logo of Equinor is seen at the company's headquarters in Fornebu, Norway May 21, 2018. REUTERS/Nerijus Adomaitis/File Photo   -   Copyright  Nerijus Adomaitis(Reuters)

OSLO (Reuters) – Britain’s Faroe Petroleum <FPM.L>, the subject of a hostile bid by DNO <DNO.OL>, has agreed to a swap of Norwegian oil and gas assets with state-controlled Equinor <EQNR.OL>, it said on Wednesday.

The binding, non-cash deal will boost Faroe’s output and cash flow while Equinor will secure stakes in fields located in the less mature Norwegian Sea.

“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,” Faroe Chief Executive Graham Stewart said in a statement.

“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,” he said.

Faroe on Nov. 26 rejected a 608 million pound bid from DNO, which it said significantly undervalued the Aberdeen-based firm.

(Reporting by Terje Solsvik and Ole Petter Skonnord; editing by Jason Neely)