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Mid-year Operational Update


Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, is pleased to provide an operational update ahead of its half yearly results which will be released on 18 September 2018.


Graham Stewart, Chief Executive of Faroe Petroleum commented:

“We have continued to deliver shareholder value in the first six months of the year, as we benefit from investment in our high quality asset base. The very significant Iris Hades discovery in April alone adds an estimated 42 million barrels of 2C oil equivalent net to the Company, substantially increasing our resource base.  We remain one of the most active and successful explorers in the sector with six further committed wells over the coming months with the Faroe-operated Rungne exploration well due to spud in September.

“The period to date has seen us deliver significant progress from an operational perspective and our exploration and appraisal programme continues to deliver material success.  Faroe’s production portfolio has seen a very active period of technical and investment driven activity.  Although this reduced first half average production it will lead to increased productivity in the second half as well as the years ahead, as we invest heavily in our existing fields as well as several new fields.  Our field development and infill programme has progressed apace and on schedule, capturing the material cost savings available as a result of the fall in oil prices. 

“We continue to actively manage our portfolio in order to optimise shareholder returns. One notable transaction in the period was the sale of a 17.5% stake in the Fenja field development, generating over £40 million and freeing up capital for investment in the pending Brasse development at our full 50% equity position.

“Our focus on maintaining balance sheet health has combined well with improved oil prices to deliver a stronger net cash position as well as markedly improved liquidity. With a fully funded programme ahead, investing across our business, and at the bottom of the cycle, I remain confident in our ability to deliver our stated production growth target of 35,000 boepd by 2021/22, designed to generate material increase in cash-flow and shareholder value.”

2018 operational update detail:


Exploration and appraisal – 44% increase in 2C Contingent Resources and multiple wells ahead

Production – within guidance with narrowed range for 2018

Development and projects – multiple projects on track and capturing lower costs

The Ula Hub Area



Greater Njord Area


Finances and balance sheet – net cash and strong liquidity

For further information please contact:

Faroe Petroleum plc
Graham Stewart, CEO
Tel: +44 (0) 1224 650 920

Stifel Nicolaus Europe Limited
Callum Stewart / Nicholas Rhodes / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

BMO Capital Markets
Tom Rider / Jeremy Low
Tel: +44 (0) 207 236 1010

FTI Consulting
Ben Brewerton / Emerson Clarke
Tel: +44 (0) 20 3727 1000


Foot notes

1. Internal estimate – difference in CPR resources estimate <10%
2. On 5 August 2018
3. The Fogelberg assignment to Dyas completed on 31 July 2018


John Wood, UK Asset Manager of the Company with over 15 years’ experience of the oil and gas industry and who holds an M.Sc in Petroleum Engineering from Imperial College, has read and approved the production and development disclosure in this regulatory announcement.

Andrew Roberts, Group Exploration Manager of Faroe Petroleum and a Geophysicist (BSc. Joint Honours in Physics and Chemistry from Manchester University), who has been involved in the energy industry for more than 25 years, has read and approved the exploration and appraisal disclosure in this regulatory announcement.

The Company’s internal estimates of resources contained in this announcement were prepared in accordance with the Petroleum Resource Management System guidelines endorsed by the Society of Petroleum Engineers, World Petroleum Congress, American Association of Petroleum Geologists and Society of Petroleum Evaluation Engineers.
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.



“1C” low estimate of Contingent Resources
“2C” best estimate of Contingent Resources
“3C” high estimate of Contingent Resources
“boe” barrel of oil equivalent
“boepd” barrels of oil equivalent per day
“capex” capital expenditure
“Contingent Resources” those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources are a class of discovered recoverable resources
“E&A” exploration and appraisal
“FSO” Floating Storage and Offloading vessel
“mmboe” millions of barrels of oil equivalent
“net” the portion that are attributed to the equity interests of Faroe
“Proved + Probable Reserves” or “2P” those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate
“PDO” the Plan for Development and Operation
“reserves” reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must further satisfy four criteria: they must be discovered, recoverable, commercial, and remaining (as of the evaluation date) based on the development project(s) applied. Reserves are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by development and production status


Notes to Editors


The Company has, through successive licence applications and acquisitions, built a substantial and diversified portfolio of exploration, appraisal, development and production assets in Norway, the UK and Ireland.

Faroe Petroleum is an experienced licence operator having operated several exploration wells successfully in Norway and the UK and is also the production operator of the Schooner and Ketch gas fields in the UK Southern Gas Basin and the Trym and Oselvar fields in the Norwegian North Sea.  Faroe has extensive experience working closely with major and independent oil companies both in Norway and in the UK.

The Company’s substantial licence portfolio provides a diverse spread of risk and reward.  Faroe has an active E&A drilling programme and has interests in a portfolio of producing oil and gas fields in the UK and Norway, including the Schooner and Ketch gas fields and the Blane oil field in the UK, and interests in the Brage, Ringhorne East, Ula, Tambar, Oselvar and Trym fields in Norway.  In 2016 the Company completed the acquisition of a package of Norwegian producing assets from DONG Energy including interests in the Ula, Tambar, Oselvar and Trym fields. Full year average production for 2018, is estimated to be between 12-14,000 boepd.

In November 2013 and March 2014 Faroe announced the Snilehorn (Bauge) and Pil (Fenja) discoveries in the Norwegian Sea in close proximity to the Njord and Hyme fields.  In July 2016, the Company announced the Brasse discovery, close to the Brage field, and the Njord North Flank (Bauge) discovery, close to the Njord field, both in Norway.  In February 2018, the Company announced the sale of part of its interest in the Fenja field and in April 2018 announced the significant Iris and Hades discoveries.

Norway operates a tax efficient system, which incentivises exploration, through reimbursement of 78% of costs in the subsequent year.  Faroe has built an extensive portfolio of high potential exploration licences in Norway, which, together with its established UK North Sea positions provides the majority of prospects targeted by the Company’s sustainable exploration drilling programme.  Faroe has had significant success in exploration on the Norwegian continental shelf, and the great majority of the Company’s 2P reserves have been generated directly from Faroe’s exploration success.

Faroe Petroleum is quoted on the AIM Market of London Stock Exchange.  The Company is funded from cash reserves and cash flow, and has access to a $250 million reserve base lending facility, with a further US$100million available on an uncommitted “accordion” basis. The Company has also raised a $100m senior unsecured bond. Faroe has a highly experienced technical team who are leaders in the areas of seismic and geological interpretation, reservoir engineering and field development, focused on creating exceptional value for its shareholders.