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The Aim 100 2018: 50 to 41

The Aim 100 2018: 50 to 41

50. Faroe Petroleum

On 4 April, just hours after Faroe Petroleum (FPM) announced discoveries at its Iris and Hades prospects, there was a change in the company’s shareholder register. Exit Delek Group – acquirer of Ithaca Energy, the highest-ranking oil producer on last year’s Aim 100 – and enter DNO, an Oslo-headquartered driller that shares interests in two of Faroe’s North Sea exploration fields.

Within a day, following a further reverse book-building process and other on-market share purchases – all at 125p – DNO’s stake had climbed to 27.7 per cent. Despite this, DNO said it had no intention of bidding for the company, and is now apparently barred from an acquisition attempt for six months. But with Faroe soon set to declare its Fogelberg field commercial, and following the profitable sale of a stake in the Fenja development, should investors feel bullish?

Possibly not. Instead of a cash offer, Colin Smith of Panmure Gordon believes DNO might instead “seek to use its equity position to exert pressure on Faroe” in ways potentially more favourable to itself than other shareholders. With fewer near-term catalysts ahead (other than higher oil prices), we suspect the shares could plateau from here. Hold. AN

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