February 27, 2019 / 3:54 PM / 3 months ago

Oil firm DNO doubles investment plan to $650 mln after Faroe deal

* DNO acquired London-based Faroe in January

* DNO paid a total of $784 million to buy Faroe

* DNO eyes output of 50,000 boepd in Norway by 2021

By Nerijus Adomaitis

OSLO, Feb 27 (Reuters) - Oil firm DNO raised its spending plan to $650 million for 2019, to take account of fields it recently acquired through the purchase of London-listed Faroe Petroleum, the Norwegian company’s chairman said on Wednesday.

Oslo-listed DNO, which produces most of its oil in the Kurdistan region of Iraq, clinched the hostile takeover in January to diversify its assets.

DNO had said on Feb. 7 that its capital and exploration spending would total $330 million, excluding Faroe’s fields, up from $193 million in 2018.

Capital and exploration expenditure at the Faroe assets is estimated to total a preliminary $315 million this year, DNO showed in an investor presentation.

The Faroe acquisition will mean about 20 percent of DNO’s recoverable reserves will be located in the North Sea, the company’s executive chairman Bijan Mossavar-Rahmani said.

DNO paid a total of 589 million pounds ($784 million) to acquire London-based Faroe, or 150.5 pence per share, when including Faroe shares acquired earlier in 2018, a company presentation showed.

DNO plans to drill a total of 30 exploration and production wells in 2019, including 10 wells offshore Norway.

The company aimed to increase its production off Norway to 50,000 barrels of oil equivalents per day (boepd) by 2021, DNO’s 50th anniversary, Mossavar-Rahmani said.

By comparison, DNO’s working interest production in Kurdistan averaged 79,747 boepd in 2018.

Mossavar-Rahmani said DNO was looking for opportunities to acquire more assets in the North Sea, but had no plans to expand into new regions. ($1 = 0.7507 pounds) (Editing by Terje Solsvik; Editing by Elaine Hardcastle)

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