For several years, Faroe Petroleum (FPM) has been the poster child for successful portfolio management. In its latest demonstration of this tendency, the North Sea explorer and producer has sold 70 per cent of its 25 per cent interest in the Fenja development to Suncor for $54.5m (£39m).
As handy as the cash is, the stake sale will also reduce Faroe’s capital expenditure outlay from £233m to around £70m, freeing up further liquidity ahead of the likely costly development of the Brasse discovery. The quantum of the Fenja sale was also well above both BMO and Panmure Gordon’s carrying value for the asset, and caused a 7.5p leap in the share price. On average, analysts expect adjusted EPS of 11.2p this year, and for 2017 results to show a 36p a share loss.
