Faroe Petroleum PLC Successful Completion of Sale of Fenja Interest (3496O)
17 May 2018 - 4:01PM
UK Regulatory
TIDMFPM
RNS Number : 3496O
Faroe Petroleum PLC
17 May 2018
17 May 2018
Faroe Petroleum plc
("Faroe", the "Company")
Successful Completion of Sale of Fenja Field Interest
Faroe Petroleum plc, the independent oil and gas company
focusing principally on exploration, appraisal and production
opportunities in Norway and the UK, is pleased to announce the
completion of the previously announced sale of its 17.5% working
interest in the Fenja development located in PL586 in the Norwegian
Sea such that Faroe retains a 7.5% working interest.
The cash consideration received by Faroe for the sale of the
Fenja interest is $68 million, reflecting the consideration amount
of $54.5 million together with working capital adjustments notably
capital expenditure incurred since the effective date of 1 January
2018.
Graham Stewart, CEO, commented:
"I am pleased to announce the completion of the sale of a
partial interest in our Fenja project. This transaction validates
Faroe's business model of generating tangible and attractive
shareholder returns from our exploration portfolio. As well as
producing an immediate cash return, the transaction reduces Faroe's
net capital expenditure on the Fenja development to approximately
$96 million. This in turn gives us additional liquidity for our
other high quality projects such as the Brasse development and
ensures we are fully funded to reach our organic production growth
target of 35,000 boepd.
"Faroe remains confident in its potential to exceed this
production growth target through additional organic developments
and investments, in addition to potential M&A
opportunities."
- Ends -
For further information please contact:
Faroe Petroleum plc Tel: +44 (0) 1224 650 920
Graham Stewart, CEO
Stifel Nicolaus Europe Limited Tel: +44 (0) 20 7710 7600
Callum Stewart / Nicholas
Rhodes / Ashton Clanfield
BMO Capital Markets Tel: +44 (0) 207 236 1010
Neil Haycock / Tom Rider
/ Jeremy Low
FTI Consulting Tel: +44 (0) 20 3727 1000
Edward Westropp / Emerson
Clarke
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.
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 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 2018, is estimated to be between
12-15,000 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, 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 and in April 2008 the 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 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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