Faroe Petroleum has been awarded five new prospective exploration licences, including one operatorship, under the 2014 Norwegian APA (Awards in Pre-defined Areas) Licence Round on the Norwegian Continental Shelf.
The Company has been awarded three new licences in the area surrounding the Company’s Pil & Bue discoveries:
- Licence PL793 Portrush – Blocks 6407/7, 8, 10 and 11: Faroe (20%), A/S Norske Shell (40% and operator), Petoro (20%) and VNG (20%): The Portrush Prospect is an analogue to the Boomerang Prospect. The main prospect at Portrush is an Upper Jurassic sandstone wedge along the main basin bounding fault, and in addition the licence area contains several other promising prospects and leads. The work programme includes licensing of 3D seismic data. The Boomerang Prospect is one of the targets to be drilled in summer 2015 by the Company (Faroe 25%) as a follow up to the Pil discovery in the PL586 licence.
- Licence PL794 Rosapenna – Blocks 6407/7 and 6407/10: Faroe (20%), Statoil (40% and operator), E.ON (20%) and VNG (20%): The Rosapenna prospect is another direct analogue to the Boomerang Prospect. The work programme includes the licensing of 3D seismic data.
- Licence PL792 Slynge – Blocks 6306/2: Faroe (50%) and Centrica (50% and operator): The Slynge area is located immediately to the south of the PL586 Pil licence with a structural setting analogous to the Pil discovery and Boomerang prospect. The work programme includes the licensing of 3D seismic data.
Norwegian North Sea
The Company has been awarded two new licences in the North Sea as extensions to existing exploration licences:
- Licence PL676BS Firklover extension – Block 25/7, 10: Faroe (40% and operator), Total E&P Norge AS (“Total”) (20%), Det norske oljeselskap ASA (”Det Norske”) (10%), E.ON (10%) and Petoro AS (20%): This North Sea licence extension is located east and south-east of the existing North Sea PL676 S licence awarded in the 2012 APA round. The extension will include up-dip areas of the Krembanan Prospect east of the existing licence area. There is no incremental work programme cost associated with this licence. The work commitment is to perform and complete technical studies already initiated in the PL676S licence.
- Licence PL627B Shango Extension – Block 25/6: Faroe (20%), Total (40% and operator), Centrica Norge AS (20%) and Det Norske (20%): This licence is located north of the PL627 licence area and covers the northern extension of the Shango Prospect which is scheduled to be drilled in the first half of 2015. There is no incremental work programme cost associated with this licence.
Graham Stewart, Chief Executive of Faroe Petroleum, commented:
“Faroe has again been very successful in its licence application strategy, winning a further five important licences in the latest Norwegian licensing round, and again demonstrating the strength of our position in Norway. These new awards enhance our licence portfolio, which is one of the largest on the Norwegian Continental Shelf. The new licences and licence extensions add exciting potential to the Company in Norway and further boost our already significant position in the highly prospective area surrounding our Pil and Bue discoveries.
“Despite the challenges of a low oil price, Faroe remains robust due to its strong, largely unleveraged balance sheet, profitable cash flow from a balanced production portfolio and modest capital commitments. This strength, in combination with Norway’s progressive and highly successful fiscal incentivisation, ensures Faroe is well placed to continue to grow its position in Norway as a key part of our value creating strategy.”