UK gas and power supplier Scottish and Southern Energy has agreed to buy a 5% stake in Faroe Petroleum as it looks to build a portfolio of upstream gas production, the companies said Friday.
SSE has agreed to buy the shares in London-listed Faroe as part of the exploration company's placement of new shares aimed at raising a total of GBP62.2 million ($100 million).
SSE said it had subscribed for GBP18 million worth of the new shares, enough to give it a 5% stake in Faroe's enlarged share capital.
SSE, one of the biggest gas and power companies in the UK, announced in April its entry into the upstream business with a $423 million deal to buy North Sea gas assets and infrastructure from Hess.
SSE said Friday the Hess deal was expected to be completed later this year and that it was now looking at more possible deals to buy upstream production in partnership with Faroe.
"Our goal is to build up a presence in the upstream gas sector in a measured way to provide an additional source of primary fuel and a hedge for our gas generation and supply activities," SSE's energy supply director Alistair Phillips-Davies said in a statement.
Faroe has relatively little oil or gas production but has an active portfolio of exploration assets across the UK, Norway and the Faroe Islands, with much of the acreage covering the frontier waters of the Atlantic margin.
Faroe's CEO Graham Stewart said the partnership with SSE should give the company a chance "to acquire high quality oil and gas production" as it looks for producing assets to provide cashflow for its exploration activities.
SSE supplies electricity and gas to around 9.6 million customers within Great Britain and Ireland's competitive electricity and gas supply markets, with growth continuing in the current financial year. It is the second-largest supplier of energy in the UK.
SSE has agreed to buy the shares in London-listed Faroe as part of the exploration company's placement of new shares aimed at raising a total of GBP62.2 million ($100 million).
SSE said it had subscribed for GBP18 million worth of the new shares, enough to give it a 5% stake in Faroe's enlarged share capital.
SSE, one of the biggest gas and power companies in the UK, announced in April its entry into the upstream business with a $423 million deal to buy North Sea gas assets and infrastructure from Hess.
SSE said Friday the Hess deal was expected to be completed later this year and that it was now looking at more possible deals to buy upstream production in partnership with Faroe.
"Our goal is to build up a presence in the upstream gas sector in a measured way to provide an additional source of primary fuel and a hedge for our gas generation and supply activities," SSE's energy supply director Alistair Phillips-Davies said in a statement.
Faroe has relatively little oil or gas production but has an active portfolio of exploration assets across the UK, Norway and the Faroe Islands, with much of the acreage covering the frontier waters of the Atlantic margin.
Faroe's CEO Graham Stewart said the partnership with SSE should give the company a chance "to acquire high quality oil and gas production" as it looks for producing assets to provide cashflow for its exploration activities.
SSE supplies electricity and gas to around 9.6 million customers within Great Britain and Ireland's competitive electricity and gas supply markets, with growth continuing in the current financial year. It is the second-largest supplier of energy in the UK.
