DNO ASA to acquire 25% stake in Arran field to boost UK Continental Shelf portfolio

DNO ASA, a prominent Norwegian oil and gas operator, today revealed that its wholly-owned subsidiary, DNO Exploration UK Limited, has finalized an agreement to acquire a 25 percent stake in the Arran field located on the UK Continental Shelf. This strategic move involves a transaction with ONE-Dyas E&P Limited, emphasizing DNO ASA’s commitment to strengthening its presence in the North Sea. The acquisition is highlighted by a purchase price of USD 70 million, with an additional contingent consideration of up to USD 5 million subject to the achievement of certain operational milestones.

The Arran field, which began its production journey in 2021, operates as a subsea tie-back to the Shearwater A platform, under the stewardship of Shell U.K. Limited. It plays a crucial role in the regional energy infrastructure, with its gas exports channeled through the Fulmar Gas line to the St. Fergus Terminal, and liquids directed to Cruden Bay via the Forties Pipeline System. For DNO ASA, this transaction signifies not only an expansion of its asset portfolio but also a substantial boost in production capabilities, expected to add approximately four million barrels of oil equivalent net to the company’s assets, predominantly composed of gas. The projected net production for 2024 stands at 2,000-2,500 barrels of oil equivalent per day (boepd), underscoring the strategic importance of this acquisition.

Chris Spencer, DNO’s Managing Director, articulated the strategic fit of the Arran acquisition within the company’s broader objectives, stating, “Arran fits neatly in our strategy of acquiring bolt-on producing assets as we develop our significant discoveries in Norway.” He further highlighted the anticipated financial synergies between Arran and DNO’s existing UK operations, which are poised for growth with ongoing development projects like Trym Restart, Andvare, and Berling soon to come online.**

DNO ASA’s North Sea portfolio, predominantly centered around Norwegian fields, currently boasts a production volume of 14,200 boepd. This figure is set to increase as the company progresses with its exploration and development initiatives. In 2023, DNO’s exploration efforts were marked by four additional discoveries and two successful appraisal wells in Norway, showcasing the company’s commitment to expanding its operational footprint and enhancing its exploration success rate.**

The effective date of the Arran field acquisition is January 1, 2024, with the transaction’s closure anticipated in the second quarter of 2024, pending approval from relevant authorities. This acquisition marks a significant milestone for DNO ASA, as it continues to fortify its position within the competitive landscape of the North Sea oil and gas sector, reinforcing its strategy of pursuing growth through strategic acquisitions and exploration success.**