In this connection, Faroe Petroleum will swap its entire stakes of 7.5% in the Njord, Hyme redevelopment and Bauge development assets with stakes divested by Equinor Energy in four production assets – Alve, Marulk, Ringhorne East and Vilje.

In the Alve field, Equinor Energy will offload a stake of 32% while in the Marulk, Ringhorne East and Vilje, it will divest stakes of 17%, 14.8% and 28.9%, respectively.

The asset swap deal, which has an effective date of 1 January 2019, is subject to approval from the Norwegian authorities.

In the Njord redevelopment project, the Equinor subsidiary will be the operator by acquiring an additional 7.5% stake to take its ownership to 27.5%. Production from the Njord field was carried out from 1997 to 2016 and is expected to be restarted in 2020.

Equinor expects the redeveloped field to produce till 2040.

In the Bauge, Hyme fields, which have been producing as subsea tiebacks to the Njord field will see Equinor increase its stake by 7.5% to 42.5%. It will be the operator of the two fields.

The remaining reserves of the Njord and Hyme fields are estimated to be 175 million barrels of oil equivalent. On the other hand, the Bauge field has a reserves estimate of 73 million barrels of oil equivalent.

Equinor operations north senior vice president Siri Espedal Kindem said: “The net effect of our agreement with Faroe is to upgrade Equinor’s portfolio in line with our updated roadmap for the NCS.

“We are strengthening our operated position in the prolific Njord area, which we believe continues to have considerable upside potential. We remain operator and majority equity holder in Alve which is produced via Norne, another important part of the Norwegian Sea for us. And we are reducing our exposure to non-core and partner-operated assets.”

For Faroe Petroleum, the deal reduces its capital expenditure significantly by eliminating expenditure on the divested assets from 2019. The assets it will take stakes is expected to accelerate targeted production growth with the addition of 7-8,000 boepd in 2019.

Faroe Petroleum chief executive Graham Stewart said: “I am pleased to announce this significant swap transaction which is in line with our stated strategy of delivering shareholder value through active portfolio management.  It immediately rebalances our asset mix towards production after a series of exploration successes and resultant development projects.”