Shango exploration well commences drilling in the Norwegian North Sea16 March 2015
Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, is pleased to announce the spudding of the Shango exploration well 25/6-5S (Faroe 20%).
The Shango prospect in Licence PL 627 (named Skirne East by the operator Total E&P Norge AS (“Total”)) is located in the Norwegian North Sea on the northern part of the Utsira High approximately 5 kilometres from the producing Skirne field, which is also operated by Total. Shango is a structural prospect where the primary target is the Middle Jurassic Hugin formation reservoir, which has proved to be of excellent quality in the neighbouring Skirne field.
Shango is located on the spill-route from the Skirne field which is producing above expectations and has been interpreted to be filled to spill. A fast-track subsea development to the Skirne field is planned if the prospect is found to contain a similar gas and condensate hydrocarbon type as found in Skirne. Skirne has been developed as a tie-back to the Statoil-operated Heimdal platform approximately 24 kilometres to the west.
The Shango exploration well, located in approximately 120 metres of water, is being operated by Total (40%) using the Leif Eriksson drilling rig with partners Centrica Resources Norge AS (20%) and Det norske oljeselskap AS (20%). Results from the well will be announced when drilling operations are complete.
Graham Stewart, Chief Executive of Faroe Petroleum commented:
“I am very pleased to announce the commencement of our 2015 exploration drilling programme, with the high impact Shango well. During the coming months we expect to start drilling the first of two follow-up wells at the significant Pil discovery (Faroe 25%) on the Blink and Boomerang prospects, and to spud the Bister prospect to follow up on our recent significant Snilehorn discovery located close to the producing Njord field infrastructure.
“Our Norwegian position is now one of the most significant of any UK independent E&P company and, despite challenging market conditions, the Company is set for another year of growth in 2015, with an exciting four well drilling programme of low cost, high impact exploration wells, fully funded from our production cash flow.”
For further information please contact:
|Faroe Petroleum plc||Graham Stewart, CEO||Tel: +44 1224 650 920|
|Stifel Nicolaus Europe Limited||Callum Stewart /Michael Shaw/Ashton Clanfield||Tel: +44 20 7710 7600|
|RBC Capital Markets||Matthew Coakes/Jeremy Low||Tel: +44 20 7653 4000|
|FTI Consulting||Edward Westropp/Tom Hufton||Tel: +44 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.
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 across the Atlantic margin, the UK and Norwegian North Sea, Norwegian Sea, Barents Sea and the Celtic Sea. 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, Maersk, OMV, Repsol, RWE Dea, Statoil, Tullow and Wintershall.
The Company’s substantial licence portfolio provides considerable spread of risk and reward. Faroe has a very active drilling programme ahead and it currently has interests in six principal producing oil and gas fields in the UK and Norway, including interests in the Schooner and Ketch gas fields and Blane oil field in the UK, and interests in the producing Njord, Brage and Ringhorne East fields in Norway. Full year average economic production for 2015 is estimated to be between 8,000 boepd and 10,000 boepd.
In November 2013 and March 2014 Faroe announced the Snilehorn and Pil discoveries in the Norwegian Sea in close proximity to the producing Njord and Hyme fields and in April 2014 the Company announced the Solberg discovery in the Norwegian Sea. In July 2014 the Company announced the successful drilling of the Bue side-track well, and provided an update of the resource range for the Pil and Bue discoveries of between 80 and 200 mmboe (gross).
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 west of Shetlands and North Sea positions provides the majority of prospects targeted by the Company’s sustainable four to five well per annum 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 $250m borrowing base facility, with a fully funded drilling programme through 2015. Faroe 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.
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