July 31, 2019 / 11:17 AM / 3 months ago

Oil firm DNO looking at Exxon Mobil's Norwegian assets

OSLO (Reuters) - Oil firm DNO (DNO.OL) is casting an eye over Exxon Mobil’s (XOM.N) Norwegian assets as it looks for more deals after buying London-based peer Faroe earlier this year, its executive chairman said on Wednesday.

Exxon Mobil said in June it was seeking bids for its stakes in fields run by other operators on the Norwegian continental shelf, including Equinor’s (EQNR.OL) Snorre oilfield and the Shell-operated (RDSa.L) Ormen Lange gas field.

“After the Faroe acquisition we are looking at more to do. There are assets available in Norway and the UK. We expect to remain active in these markets,” DNO’s Executive Chairman Bijan Mossavar-Rahmani told a quarterly result presentation.

He told Reuters later that the company was also looking at the assets Exxon Mobil is seeking to sell.

“We are looking because that gives us market information, and maybe opportunities (to buy),” he said.

DNO completed its $780 million purchase of Faroe Petroleum in March 2019, and said it had a $574 million cash balance at the end of the second quarter.

It said it would focus on buying assets which are already producing or under development as it seeks to increase its North Sea output to 50,000 barrels of oil equivalents per day (boepd) in 2021 from around 14,692 boepd in the second quarter.

“It’s an ambitious target, but it’s doable. It could be a combination of organic and non-organic growth,” Mossavar-Rahmani told analysts.

DNO’s combined Company Working Interest production in the North Sea and the Kurdistan region of Iraq stood at 103,900 boepd in the second quarter, up from 74,470 boepd the same period a year ago.

Shares of the Middle East and North Sea-focused company rose by more than 5% on Wednesday after it reported a rise in earnings before interest, tax, depreciation and amortization to $177 million in the second quarter from $105 million in the same period a year ago.

Analysts at brokers DNB Markets and Pareto Securities said the result beat their forecasts, partly due to lower than expected exploration expenses.

DNO repeated its 2019 capital spending guidance of $375 million, and reiterated that spending including exploration would amount to $440 million.

Its shares were trading up 3.3% at 1032 GMT, outperforming the wider European oil and gas index .SXEP, which was up 0.3%.

Editing by Terje Solsvik; Editing by Mark Potter

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