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Operational Update

Operational update

Faroe Petroleum, the independent oil and gas company focussing principally on exploration, appraisal and production opportunities in the Atlantic margin, the North Sea and Norway, is pleased to provide an operational update.

Highlights
2013 Exploration programme

Current exploration wells

Planned near term exploration wells

Licensing rounds

Production

*2012 production includes East Foinaven. Faroe receives the economic benefit for the full year of production from 1 January 2012 from East Foinaven but will only account for production from the completion date expected in H1 2013

Exploration programme

Production

Full year production was within the range of management expectation but was impacted by unscheduled down time on the Njord, Brage and Blane fields in Q4. On the Njord field re‐instatement of production following a planned shutdown was delayed by an accident involving the third party mobile accommodation unit, the Floatel Superior. The Blane field was also down for nearly ten weeks in late 2012, whilst repairs were undertaken after a gas leak had been detected on the Ula platform to which it ties back. Production was temporarily impacted on Brage due to gas processing and export limitations.

All fields are now back on production and first oil from the Hyme field is expected in Q1 2013. The combined Group production from our five principal fields (Brage, Ringhorne East, Njord, Blane, Schooner) and the new additions (Hyme and East Foinaven) is expected to average between 7,000 and 9,000 boepd in 2013.

Graham Stewart, Chief Executive, Faroe Petroleum said:

“We are pleased to provide an update on current operations and a look forward to our continuing active exploration programme for 2013. Production in 2012 has been in line with expectations and has funded both our exploration programme and a significant proportion of our development capex. Aside from our production cash flow, we have robust cash balances and a substantially undrawn debt facility. We expect higher average production rates in 2013, and, as in 2012, we expect that the cash flow from production will fully fund the exploration programme and a large part of the development capex, with the remainder being funded from reserves and our debt facility, as appropriate.

“We drilled six exploration wells during 2012 and the pace of our exploration programme has continued into 2013 with a further five exploration wells planned for 2013 as well as five development wells. The Company is in an excellent position to maintain its momentum in exploration and to make further investments as we execute our growth strategy through the drill bit.”

For further information please contact:

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

Panmure Gordon (UK) Limited
Katherine Roe/Callum Stewart
Tel: +44 20 7886 2500

Oriel Securities Limited
Michael Shaw/Ashton Clanfield
Tel: +44 20 7710 7600

FTI Consulting
Billy Clegg/Edward Westropp
Tel: +44 20 7831 3113

Notes to Editors

The Company has, through successive licence applications and acquisitions, built a substantial portfolio of exploration, appraisal, development and production assets across the Atlantic Margin, the UK and Norwegian North Sea, Norwegian Sea, Barents Sea and offshore Iceland. Faroe Petroleum has extensive experience working with major and independent oil companies and its joint venture partners include BP, Centrica, DONG, E.ON Ruhrgas, GDF, OMV, Repsol, RWE Dea, Statoil and Wintershall.

The Company’s licence portfolio provides considerable spread of risk and reward, encompassing over 50 licences. Faroe Petroleum currently has interests in five principal producing oil and gas fields in the UK and Norway, including interests in the Blane oil field and Schooner gas field in the UK, and interests in the producing Njord, Brage and Ringhorne East fields in Norway.

Faroe Petroleum is quoted on the AIM Market of London Stock Exchange plc with offices in Aberdeen, Stavanger, London and Torshavn. The Company is well financed with a fully funded drilling programme in 2013 and has highly experienced technical teams who are leaders in the areas of seismic and geological interpretation, reservoir engineering and field development, focused on creating exceptional value for its shareholders.