TIDMFPM
RNS Number : 1938N
Faroe Petroleum PLC
16 January 2019
16 January 2019
Faroe Petroleum plc
("Faroe", "Faroe Petroleum", the "Company")
Edinburgh Prospect Partnership
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 its partnership with
subsidiaries of Royal Dutch Shell plc ("Shell") and Spirit Energy
Limited ("Spirit") following the award of PL 969 in the recent APA
licensing round with the intention to advance the large,
cross-border Edinburgh prospect towards a drill decision during
2019.
Through a series of arrangements entered into during 2018, the
licence partners have agreed to equalise equity in UK Block 30/14a
(Edinburgh Area) and UK Block 30/14b on the same basis as the award
in the adjacent Norwegian Blocks 1/6 and 1/9 (PL 969) (together the
"Edinburgh Area") as follows:
Company 30/14a (UK) 30/14b (UK) 1/6, 1/9 (NO)
Faroe 45% 45% 45%
------------ ------------ --------------
Shell 40% 40% 40%
------------ ------------ --------------
Spirit 15% 15% 15%
------------ ------------ --------------
The equity equalisation remains subject to certain terms and
conditions between the parties and awaits deal completion of the
acquisition related to UK Block 30/14a (Edinburgh Area) from Total
Oil UK Limited. It has been agreed by the parties that Faroe will
operate the Edinburgh Area licences up until a final well decision
is taken by the licence partners, after which Shell will become
licence operator.
The Edinburgh Area contains the large Edinburgh prospect, which
straddles the UK/Norway border in the Central North Sea at the
south eastern end of the prolific Josephine Ridge area. The
structure is a large, tilted Mesozoic fault block, and is
considered to be one of the largest remaining undrilled structures
in the Central North Sea covering an area of over 40 square
kilometres. The prospective reservoirs include the Upper Jurassic
Ula age-equivalent (Freshney and Fulmar) and Triassic Skagerrak
formations.
On a preliminary, unaudited basis, Faroe's management estimates
the Edinburgh prospect to have material volumes with potential for
standalone development.
Graham Stewart, Chief Executive of Faroe Petroleum,
commented:
"We are pleased to announce the alignment of equity in the
Edinburgh Area amongst such a strong partnership, having worked to
resolve the commercial impediments in the area for over eight
years. The partnership's combined operating experience in both the
UK and Norway represents a distinct advantage in bringing the
drilling of this high impact exploration prospect closer to
fruition. We look forward to working with the respective UK and
Norwegian authorities to progress this exciting cross-border
opportunity."
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 30 years, has read and approved the
exploration and appraisal disclosure in this regulatory
announcement.
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 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 and
in December 2018 announced a transaction with Equinor to swap the
Company's interests in Njord, Hyme and Bauge for interests in four
producing fields, Alve, Marulk, Ringhorne East and Vilje .
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 GBP83 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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