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Operational Update


Faroe Petroleum, the independent oil and gas company focussing principally on exploration, appraisal and production opportunities in Norway and the UK, is pleased to provide an update on operations and guidance for 2017.

Graham Stewart, Chief Executive of Faroe Petroleum commented:

2016 was transformational for Faroe with the acquisition of a Norwegian portfolio of producing assets from DONG doubling group production, the material Brasse discovery in Norway, and a successful £66million equity fund raise.  Production from our UK/Norwegian portfolio averaged approximately 17,400 boepd in 2016, and we increased our 2P reserves base by 42% to 81 mmboe. We ended the year with a significant cash position of £97million and a new seven year Reserve Based Lending facility of $250million which is undrawn.

“We are now poised for a major growth phase as we invest across our core hub assets in 2017 and beyond, and believe that we have the asset base to reach our stated goal of 40-50,000 boepd over the next five years. We continue to seek to capitalise on our strong financial position to pursue consolidation opportunities in our core areas on the UK and Norwegian continental shelves, while kicking off another exciting high impact exploration drilling campaign.”


Reserves and Resources – significant increase in reserves and high grading of contingent resources in 2016
Faroe has completed its internal assessment of reserves and resources at 1 January 2017, which are as follows:

The table set out below presents the 2P Reserves net to Faroe by geographic location and split into oil and liquids reserves and gas reserves.  The reserves are reported in accordance with the Petroleum Resources Management System (PRMS), the joint reserves/resources definitions of the Society of Petroleum Engineers, the World Petroleum Congress and the American Association of Petroleum Geologists.

Proven plus Probable (2P) Reserves at 1 January 2017
Liquids (mmstb) Gas (bcf) Total (mmboe)
Brage Area 7.2 3.9 7.8
Trym 0.5 11.3 2.4
Ula Area (excl. Blane) 21.3 13.3 23.5
Njord Area 29.1 79.5 42.4
Total Norway 58.0 108.0 76.0
UK (incl. Blane) 2.9 14.3 5.3
Group 60.9 122.3 81.3


Production – significantly enhanced through asset acquisitions and field development programme to deliver long term profitable production growth

Development – high quality developments progressing in 2017 to deliver material organic growth in production profile

The Ula Hub Area

The Njord Hub Area

The Brage Hub Area

Exploration & Appraisal – following a successful 2016 with the drill bit for Faroe, 2017 has commenced with the high impact Boné well

Financial – Faroe ended 2016 in a robust financial position with significant cash reserves, enhanced production cashflow and a new, undrawn seven year RBL facility

Approximately 30% of post-tax oil production hedged at $54/bbl (principally with puts)

Conference Call

An updated presentation is available on our web site and a conference call for sell-side analysts will take place at 08.30 a.m. today. Please use the dial-in details below and request access to the Faroe Petroleum conference call.

Dial-in: +44 (0) 1452 562 815
Passcode: Faroe Petroleum
For further information please contact:

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

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

RBC Capital Markets
Matthew Coakes/Roland Symonds
Tel: +44 20 7653 4000

FTI Consulting
Edward Westropp/Kim Camilleri
Tel: +44 20 3727 1000


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.

Reserves Assessment

To assess the reserves, the Company has used the definitions and guidelines set out in the 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).







awards in pre-defined areas

“bscf” billions of standard cubic feet
“best estimate” an estimate representing the best technical assessment of projected volumes. Usually the P50 value. For Contingent Resources, the term of best estimate is denoted as 2C
“boe” barrel of oil equivalent
“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
“FDP” Field Development Plan
“mmboe” millions of barrels of oil equivalent
“mmstb” millions of barrels of stock tank oil
“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
“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 U.K. 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 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 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 2017, is estimated to be between 12,000-15,000 boepd.

In November 2013 and March 2014 Faroe announced the Snilehorn and Pil discoveries in the Norwegian Sea in close proximity to the Njord and Hyme fields.  More recently, 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.

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.  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.