Faroe Petroleum PLC (LON:FPM) told investors it is pleased that DNO has withdrawn its requisition for a general meeting, which had sought boardroom representation.
It follows a statement by DNO, released yesterday.
“The board is pleased that DNO has withdrawn the requisition which would have been costly and time-consuming and, the board believes, would ultimately have been soundly defeated based on the board's discussions with its major institutional shareholders,” Faroe said in a statement.
DNO, which in recent months has built a 28.23% stake in Faroe, had stated its “deep disappointment” over Faroe’s “repeated peremptory and disdainful attitude” towards DNO’s request for representation.
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The shareholder added: “DNO requested a meeting of shareholders to seek suitable representation on the board of directors of Faroe Petroleum and to raise concerns and dismay about the wider governance culture and shareholder value strategies of a company in which DNO has made a very substantial investment.
“Now that DNO has highlighted these matters via an Extraordinary General Meeting notice and given Faroe Petroleum's increasingly hostile public response on 16 August 2018, DNO will not pursue a meeting of shareholders at this time while it considers its position.”
Today, Faroe said that it gives DNO’s reasons for withdrawal “no credence” and added: “the appointment of DNO nominated directors would be inconsistent with the principle of an independent board and normal practice and precedent for companies operating on the Norwegian Continental Shelf.”
“Faroe maintains a strong corporate governance culture in line with UK corporate governance best practice with five Independent Non-Executive Directors representing the interests of all shareholders.”
Oslo-headquartered DNO’s primary assets are based in Northern Iraq, in Kurdistan, where it generated some US$347mln of revenue in 2017, producing over 73,000 barrels of oil per day.
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DNO re-entered Norway in mid-2017 when it acquired Origo Exploration by assuming the explorer’s work commitments.
Subsequently, DNO applied for ten exploration licences in Norway’s 2017 licensing round (seven in the Norwegian North Sea, one in the North Sea and two in the Barents Sea), and that adds to nine other licences it holds across Norwegian and UK waters.
In a recent investor presentation, DNO said it was “actively pursuing” additional stakes in the region including exploration, development and production assets.
The Norwegian company has previously talked about a potential listing and as a result of its partnership with Genel Energy, in the Kurdistan region of Northern Iraq, it is not unfamiliar to London’s oil investors.
In April, DNO said it had decided to build a long-term strategic shareholding in the company.