TIDMFPM
RNS Number : 2472H
Faroe Petroleum PLC
14 November 2018
14 November 2018
Faroe Petroleum plc
("Faroe", "Faroe Petroleum", the "Company")
Rungne Exploration Well Results
Faroe Petroleum, the independent oil and gas company focusing
principally on exploration, appraisal and production opportunities
in Norway and the UK, announces the results of the Faroe-operated
Rungne exploration well 30/6-30 in the Norwegian North Sea (Faroe
40% working interest).
The well encountered a 56 metre gross (17 metre net)
gas/condensate column in good quality interbedded Middle Jurassic
Ness formation sandstones and 86 metres of gross water bearing
reservoir in the primary Oseberg formation target. No hydrocarbon
contact was encountered within the Ness formation. Data acquisition
has been undertaken including coring, logging and fluid
sampling.
The preliminary gas and condensate recoverable volume range for
the discovery in the Ness formation is likely to be in the range of
12-75 bscf and 0.5-3.9 mmbbls respectively (combined 2.7-17.0
mmboe) and therefore unlikely to be commercial in isolation.
The Rungne exploration well 30/6-30 spudded on 19 October 2018
and was drilled to a total depth of 3,469 metres below sea level.
Drilling operations were undertaken using the semi-submersible
Transocean Arctic rig.
The current joint venture partners in the PL 825 licence are
Faroe Petroleum (40% and operator), Lundin Norway AS (30%*) and
Spirit Energy Norge AS (30%*). Subject to completion of two recent
transactions, the PL 825 partnership will consist of Faroe (40% and
operator), Equinor Energy AS (30%*), Spirit Energy Norge AS (20%*)
and DNO Norge AS (10%*).
Graham Stewart, Chief Executive of Faroe Petroleum,
commented:
"In a six well exploration programme some disappointing outcomes
are inevitable. Although no hydrocarbons were present in the main
Oseberg target we are pleased to have encountered hydrocarbons in
the secondary Ness target which provides new data.
"In addition to the ongoing Agar/Plantain well, results from
which are expected shortly, Faroe's exploration programme will
continue over the remainder of the year with two further committed
exploration wells in Norway: the Brasse East (Faroe-operated) and
Cassidy wells."
For further information please contact:
Faroe Petroleum plc Tel: +44 (0) 1224 650
Graham Stewart, CEO 920
Stifel Nicolaus Europe Limited Tel: +44 (0) 20 7710
Callum Stewart / Nicholas Rhodes / Ashton 7600
Clanfield
BMO Capital Markets Tel: +44 (0) 207 236
Tom Rider / Jeremy Low / Tom Hughes 1010
FTI Consulting Tel: +44 (0) 20 3727
Ben Brewerton / Sara Powell / Toby Chidavaenzi 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.
The Company's internal estimates of resources contained in this
announcement were prepared in accordance with the Petroleum
Resource Management System guidelines endorsed by the Society of
Petroleum Engineers, World Petroleum Congress, American Association
of Petroleum Geologists and Society of Petroleum Evaluation
Engineers.
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.
* Lundin Norway AS and Spirit Energy Norge AS have assigned
respectively a 20% and 10% interest in PL825 to Equinor Energy AS
and Lundin Norway AS its remaining 10% to DNO Norge AS, all of
which are subject to completion.
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 has extensive experience working
closely with major and independent oil companies and is an
experienced operator of both exploration and production
licences.
The Company's substantial licence portfolio provides a diverse
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 and Trym fields in Norway and the Blane
oil field in the UK. In 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
12-14,000 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, close to the Brage field, and the
Njord North Flank (Bauge) discovery, close 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 2018 announced the
significant 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 has had significant success in
exploration on the Norwegian continental shelf, and the great
majority of the Company's 2P reserves have been generated directly
from Faroe's exploration success.
Faroe Petroleum is quoted on the AIM Market of London Stock
Exchange. The Company is funded from cash reserves and cash flow,
with a net cash position of GBP84 million (unaudited) at 30 June
2018, up from GBP75 million at 31 December 2017 and in addition has
access to a $350 million reserve base lending facility. The Company
has also raised a $100 million senior unsecured bond which is
listed on the Oslo Børs. 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.
Glossary
bscf billions of standard cubic feet
mmbbls millions of barrels
mmboe millions of barrels of oil equivalent
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contact rns@lseg.com or visit www.rns.com.
END
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