Faroe Petroleum Acquires North Sea Interests for $20M

Faroe Petroleum announced Tuesday its conditional acquisition of Roc Oil (GB Holdings) Limited for a payment that could total up to $20 million.

Roc GB holds a 12.50 percent interest in the Blane field and a 12.00 percent interest in the Enoch field, both of which are located in the UK North Sea. The acquisition, which would increase Faroe Petroleum’s interest in the Blane and Enoch fields to 30.50 percent and 13.86 percent, respectively, is expected to complete before the end of 2015 and is subject to UK regulatory approval, as well as a waiver of certain conditions by the Blane unit joint venture partners. The deal includes an initial payment of $17 million, followed by a deferred payment of up to $3 million depending on certain performance targets being met.

Graham Stewart, chief executive of Faroe Petroleum, commented in a company statement:

“We are very pleased to announce this acquisition, which increases our stake in the low cost, high quality and long field life Blane asset. Blane offers significant upside potential in the form of increasing reserves and production as well as in extending field life. The transaction is also very tax efficient for us, providing shelter for both past and future tax losses in the UK. We have at this stage chosen not to amend our production guidance for the year but will review this at the time of our interim results in September.

“Meantime, drilling operations on the Boomerang and Portrush prospects continue as scheduled, and the company will announce these results when drilling operations are complete, expected in September 2015.”

The Boomerang prospect is located in license PL586 and the Portrush prospect is located in license PL793, both of which are situated in the Norwegian Sea.

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