The boss at Aberdeen-based Faroe Petroleum said sellers’ expectations were still making it difficult to get deals for North Sea assets over the line.
But Faroe chief executive Graham Stewart said the company was prepared to be patient in its quest to beef up its portfolio.
Mr Stewart was speaking after Faroe announced a deal to buy a near-14% stake in the Blane field in the UK North Sea from Japanese firm JX Nippon for £4million.
Blane, discovered in 1989, is in the Central Graben Area and extends into the Norwegian sector.
The acquisition, which is expected to go through later this year, increases Faroe’s interest in the Blane field in the UK sector of the North Sea to 44.5%.
Blane was developed as a sub-sea tie-back to the Ula platform, which is 20% Faroe-owned.
The field, which started producing in 2007, pumped out about 2,900 barrels of oil equivalent per day in 2016 and Faroe believes it can extend the field’s life and reduce operating costs.
Partners on Blane include operator Repsol Norge, Dana Petroleum and Repsol Sinopec Resources UK.
Mr Stewart said yesterday that Faroe was keen to do more deals, but admitted the market is still tricky.
He said: “We are looking at potential transactions and will just have to see what happens. It’s quite hard at the moment. A lot of sellers are not prepared to accept the prices we’d like to pay.
“There is still quite a big difference in valuation, so much so that even private equity is finding it hard to get near the prices sellers want.
“… It’s a time for patience and we are patient. We will keep working away until we find the right deals.”
Mr Stewart also said Faroe was busy developing existing licences.
Earlier this week, the company upgraded the reserve estimates for the Brasse field in the Norwegian North Sea following the drilling of a sidetrack well.
Faroe said recoverable resource volumes now stand somewhere between 56million and 92million barrels of oil equivalent (boe), up from previous estimates of 43-80million.
Yesterday, Mr Stewart said an exploration well would be drilled on the Goanna prospect, also in the Norwegian North Sea.
He said Wellesley Petroleum, which operates and holds 70% of Goanna, was covering the cost of the exploration well.
Faroe’s goal is to increase average production to between 40,000 and 50,000 boe per day over the next five years
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