Faroe Completes Acquisition of East Foinaven Field
Northern Europe-focused junior oil firm Faroe Petroleum reported Friday that it has completed its acquisition of a 10-percent interest in the BP-operated East Foinaven oilfield and a 0.5-percent interest in the West of Shetland Pipeline System from Marubeni Oil & Gas (North Sea) Limited. The acquisition was first announced in September 2012.
Faroe said that it will pay $22.5 million for the acquisition from its existing cash resources.
Remaining proved and probable reserves at East Foinaven as of Jan. 1 2013 were 1.2 million barrels of oil equivalent net to Faroe, the firm said, with average daily production net to the company coming in at 400 barrels of oil equivalent per day during the first six months of this year.
Faroe Chief Executive Graham Stewart commented in a company statement:
"We are very pleased to broaden our production base further through the acquisition of the East Foinaven interest, which boosts and diversifies our oil and gas production portfolio.
"East Foinaven is a good quality, long life producing oil field which provides significant upside potential in one of our core areas. The transaction is very tax efficient for Faroe Petroleum, providing shelter for both past and future tax losses in the UK and is in line with our strategy to grow our production base in order to fund the Company's very active exploration program.
"We look forward to an exciting period of exploration drilling kicking off with the Snilehorn well in Norway scheduled to commence at the end of Q3 2013, followed by a further five wells as we head into 2014."
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