FAROE Petroleum has said trading in its shares will be cancelled after DNO passed a key threshold in its hostile takeover of the company which underlined the potential of an exploration prospect straddling UK and Norwegian waters.

Aberdeen-based Faroe said Norway’s DNO had acquired or agreed to acquire around 76.64 per cent of its shares after making a successful hostile bid that valued the firm at £640 million.

The latest purchases take DNO above the 75% required to cancel the trading of Faroe shares on the Aim market, which the company joined in 2003.

Faroe said the cancellation is expected to take effect at 7.00 a.m. on February 14, following which it will re-register as private limited company.

It noted: “There will be no ready market for Faroe’s shares following the Cancellation.”

The takeover followed a bitter war of words between the firms, with Faroe directors accusing DNO of trying to buy it on the cheap.

On Friday Faroe announced that chief executive Graham Stewart was quitting the company with two fellow executive directors, after DNO’s success triggered the vesting of options awards held by the men worth around £18.6 million.

The company said the directors would remain in post until replacements were appointed to ensure an orderly transition.

Yesterday Mr Stewart welcomed news that Faroe had agreed deals with Shell and Spirit Energy that could pave the way for drilling on the Edinburgh prospect in the Central North Sea after eight years “trying to resolve the commercial” impediments in the area concerned.

“The partnership’s combined operating experience in both the UK and Norway represents a distinct advantage in bringing the drilling of this high impact exploration prospect closer to fruition,” said Mr Stewart.

Faroe said the prospect is one of the largest remaining undrilled structures in the Central North Sea covering an area of over 40 square kilometres.

The agreement reached by the three firms comes amid a drive to encourage firms working in the North Sea to collaborate to help maximise the potential of the area.

It involved tweaking the ownership arrangements covering adjoining blocks in UK and Norwegian waters so the firms’ holdings were the same on either side of the border.

Faroe made a find off Shetland in December with Cairn Energy and Azinor Catalyst.

The company announced yesterday that it had been awarded eight further licences off Norway in the round.