Aberdeen-based Faroe Petroleum — which has rejected a hostile £610 million cash takeover bid from Norwegian oil and gas company DNO — on Wednesday published “an independent current valuation report on Faroe’s assets” which it said “clearly highlights the inadequacy of DNO’s offer of 152p per share …”

Faroe said the report implies a valuation for Faroe in the range of 186p to 225p per share.

“Gaffney, Cline & Associates (GCA), a leading independent oil and gas industry expert, concludes that the value of Faroe’s oil and gas assets reflecting current market oil pricing is in the range of US$879m – US$1,076m …” said Faroe.

“This implies a valuation for Faroe in the range of 186p to 225p per share on a fully diluted basis adjusting for net cash as at 30 September 2018, representing a 22% – 48% premium to DNO’s Offer price …

“GCA’s valuation further reinforces the board’s view that DNO’s offer is opportunistic and substantially undervalues Faroe …”

Faroe operates in the UK North Sea and Norway’s North Sea.

DNO recently increased its shareholding in Faroe to about 28.47%.

Faroe chairman John Bentley said: “GCA’s independent valuation clearly supports our view that DNO’s offer substantially undervalues Faroe.

“Its valuation of Faroe’s oil and gas assets implies a value per share for Faroe in the range of 186p to 225p per share representing a 22%-48% premium respectively to DNO’s Offer price.”