In a move as surprising as TransGlobe's entry into Canada, DNO has announced the acquisition or Origo Exploration, a UK and Norway focussed private explorer backed by GNRI, Riverstone and Temasek. As consideration, DNO will assume Origo's exploration commitments and licence obligations.
Origo has interests in 11 blocks offshore UK and Norway, with 20-30% non-operated interest in each block. This portfolio is expected to generate around three exploration drilling opportunties per year. The management team and staff will be reataiend as part of the acquisition as will its office in Stavanger.
DNO could use this platform to establish a North Sea base (organically and through acquisitions), and although the strategic logic of this acquisition is currently unclear, it presents a new region for DNO to replicate its past exploration and operational success. It also signals the fact that DNO may see limited attractive opportunities in Kurdistan to reinvest its growing cash base on a risk-reward basis.
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| Origo Portfolio Source: Company information, NPD |
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