StockMarketWire.com - Faroe Petroleum said an independent valuation of its assets highlighted that DNO's 152p-a-share offer undervalued the company.

Gaffney, Cline & Associates, an independent oil and gas industry expert, concluded that the value of Faroe's oil and gas assets reflecting current market oil pricing was in the range of US$879m to US$1,076m, implying a valuation of between 186p and 225p a share, Faroe Petroleum said.

The independent valuation 'further reinforces the Board's view that DNO's offer is opportunistic and substantially undervalues Faroe,' the company added.

'GCA's independent valuation clearly supports our view that DNO's Offer substantially undervalues Faroe. Its valuation of Faroe's oil and gas assets implies a value per share for Faroe in the range of 186p to 225p per share representing a 22%-48% premium respectively to DNO's Offer price,' said John Bentley, Non-Executive Chairman of Faroe.

GCA estimated Faroe's 2P Reserves as at 30 September 2018 to be about 102 million barrels of oil equivalent.

In a separate report, Faroe Petroleum confirmed that no hydrocarbons were found in the Brasse East prospect following a period of drilling. But said it was pleased with the results of the appraisal sidetrack which confirmed hydrocarbons within the northern part of the Brasse field, as expected.

Preliminary analysis of the log data acquired whilst drilling the Brasse appraisal well 31/7-3 A sidetrack indicated the well encountered approximately 40 metres of gross hydrocarbon-bearing Jurassic reservoir.

Further wireline logging was ongoing and would be incorporated into the final well results, the company said.

'Although no hydrocarbons were present in the Brasse East prospect we are pleased with the results of the appraisal sidetrack which confirms hydrocarbons within the northern part of the Brasse field, as expected,' said Graham Stewart, Chief Executive of Faroe Petroleum.

'In addition, the excellent sand quality in the Brasse East Exploration well has reduced the reservoir risk of the Brasse Extension exploration prospect located to the north east of the Brasse field.'

At 8:03am: [LON:FPM] Faroe Petroleum PLC share price was -2.5p at 144.5p



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