Faroe re­jects takeover bid and Amerisur se­cures farm-out

Sig­nif­i­cant cor­po­rate ac­tiv­ity in the oil and gas sec­tor de­spite oil price volatil­ity

Shares - - BIG NEWS -

The de­ci­sion of Faroe Pe­tro­leum (FPM:AIM) to re­ject a hos­tile takeover bid from 28% share­holder DNO (26 Nov) re­flects the lack of gen­eros­ity in the ini­tial 152p cash of­fer. While this rep­re­sented a 20% premium to the price at which the shares traded be­fore the bid emerged, it is ma­te­ri­ally lower than the 170p+ seen as re­cently as Oc­to­ber.

Bro­ker Can­tor Fitzger­ald com­ments: ‘In our view DNO has taken ad­van­tage of the re­cent oil price weak­ness in or­der to at­tempt to ac­quire the com­pany on the cheap’.

Canac­cord Ge­nu­ity an­a­lyst Char­lie Sharp thinks a ri­val bid is un­likely given Nor­we­gian firm DNO’s big share­hold­ing. In­vestors will be watch­ing closely to see if DNO re­turns with a more gen­er­ous of­fer.

Mean­while, sec­tor peer Amerisur Re­sources (AMER:AIM) ap­pears to have got a bet­ter deal with its $93m farm-out agree­ment with US firm Oc­ci­den­tal (23 Nov).

This should fa­cil­i­tate an ac­cel­er­a­tion of ex­plo­ration drilling on Amerisur’s acreage in Colom­bia, at lim­ited cost to the com­pany, tar­get­ing up­wards of 650m bar­rels of oil equiv­a­lent. Amerisur chief ex­ec­u­tive John War­dle has sub­se­quently bought £1m worth of stock.

By Tom Sieber Deputy Ed­i­tor

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