New exploration licence awarded in UK 30th Round24 May 2018
Faroe Petroleum, the independent oil and gas company focussing principally on exploration, appraisal and production opportunities in Norway and the UK, is pleased to announce that it has been awarded a new prospective exploration licence under the 30th Licence Round on the UK Continental Shelf.
Block 30/14b – Edinburgh – Faroe 100% and Operator
The Edinburgh prospect straddles the UK/Norway border in the Central North Sea, at the south eastern end of the prolific Josephine Ridge area, south of the producing Blane field (Faroe 44.5%) and adjacent to the producing Flyndre/Cawdor fields operated by Maersk. The structure is a large, tilted Mesozoic fault block, and is one of the largest remaining undrilled structures in the Central North Sea covering an area of over 40 square kilometres. The prospective reservoirs in this new licence include the Triassic Skagerrak Formation and the Upper Jurassic Ula age-equivalent (Freshney and Fulmar) proven reservoir sandstones.
The large Edinburgh prospect spans multiple licences in UK and Norwegian waters of the North Sea, and is also stratigraphically split across one licence. Faroe’s experience of partnering and operating in both the UK and Norway represents a distinct advantage in bringing the drilling of this highly exciting exploration prospect to fruition.
The licence work programme comprises a drill-or-drop well, pore pressure analysis and structural studies.
Graham Stewart, Chief Executive of Faroe Petroleum, commented:
“We are pleased to announce the award of Block 30/14b which contains the high-impact Edinburgh prospect. This award is significant in that it is our first new licence in the UKCS since 2014 and leverages Faroe’s considerable knowledge and technical expertise gained over many years of activity in both UK and Norwegian waters in order to access attractive cross-border opportunities such as Edinburgh.
“Faroe is targeting multiple potential new discoveries with a significant exploration and appraisal programme of six wells committed in 2018 alone, taking full advantage of current low rig rates. Faroe’s track record in exploration has been outstanding, having delivered the vast majority of the Company’s 2P reserves and 2C resources. This in turn has led to the Company’s very significant development programme designed to more than treble current production rates over the coming years. The exciting Fogelberg appraisal well is currently underway, to be followed by the high-impact Rungne exploration and then the new Brasse East exploration well, both of which are located near to the Brasse field.
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
Neil Haycock / Tom Rider / Jeremy Low
Tel: +44 (0) 207 236 1010
Edward Westropp / Emerson Clarke
Tel: +44 (0) 20 3727 1000
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.
This announcement does not contain inside information.
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 also has extensive experience working with major and independent oil companies both in Norway and in the UK.
The Company’s substantial licence portfolio provides a considerable 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 Norway and the UK including interests in the Brage, Ringhorne East, Ula, Tambar, Oselvar and Trym fields in Norway and the Schooner and Ketch gas fields and the Blane oil field in the UK. In December 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 12-15,000 boepd.
In November 2013 and March 2014 Faroe announced the Snilehorn 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, next to the Brage field, and the Njord North Flank discovery, next to the Njord field, both in Norway. In February 2018, the Company announced the sale of part of its interest in the Fenja field.
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 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 $250million 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.
Block 30/14b – Edinburgh