Faroe Buys 12.5% Stake in Barents Sea Well

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Oil sector analysts have hailed Faroe Petroleum's acquisition of a 12.5-percent interest in the Darwin prospect offshore Norway as a significant step towards the company establishing a strategic position in the Barents Sea.

Faroe announced Thursday that it has acquired the interest in the Norwegian PL531 license, which contains the Darwin prospect, from Talisman Energy Norge. In return, Faroe has agreed to carry Talisman's retained 12.5-percent share of the base well cost.

Drilling operations in the license area are being conducted by Repsol Exploration Norge, which has a 20-percent interest. Other partners in the license include Marathon Oil Norge (10 percent), RWE Dea Norge (25 percent) and Concedo (20 percent).

The Darwin prospect is a high-impact wildcat exploration well located on the Veslemøy High in the frontier western part of the Barents Sea. The prospect is a large closure at multiple levels, which is contained within the PL531 license and located approximately 37 to 50 miles to the south west of the recent Statoil Skrugard and Havis oil discoveries. Multiple targets have been identified on 3D seismic. The first exploration well is expected to spud no sooner than December 2012.

In a statement accompanying the announcement, Faroe Chief Executive Graham Stewart commented:

"PL531 is an important new position in the promising western part of the Barents Sea – an area where a major breakthrough was achieved last year with the giant Skrugard oil discovery and which is expected to be highly competed for in the upcoming 22nd Licensing Round."

Analysts at London-based investment bank Seymour Pierce said: "We see this as another important acquisition for Faroe as it continues to build a strategic position in the Barents Sea, consolidating its two large existing licenses in the Bjarmeland basin."

Analysts at Oriel Securities agreed. "The acquisition of this share in PL531 is an important step towards Faroe's ambition of building a strategic position in the Barents Sea," they said.

 

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