A spate of fundraisings in recent weeks suggests investor appetite is slowly returning to the oil sector. The latest comes from Faroe Petroleum (FPM), which has raised £62m in an oversubscribed placing to fund the acquisition of a series of producing assets and licences from Dong Energy, and to monetise its recent Brasse discovery.
Faroe's shares dropped 9 per cent to account for the slightly dilutive effect of the 70p a share placing, although shareholders are likely to be pleased by the price paid to book 19.8mmboe of proved reserves. At $3.5 (£2.6) a barrel of oil equivalent, this is a little over a third of the average price paid in Norwegian oil and gas asset deals in the last two years. Prior to this fundraising, Peel Hunt was forecasting a full-year adjusted pre-tax loss of £13.6m, giving a 5p loss per share (from pre-tax profit of £12.3m and EPS of 4.5p in FY2015).
