The License was awarded under the First Faroese Licensing Round in 2000 and held in a joint venture between Faroe Petroleum and Eni. The License is located in the southeastern corner of the Faroese territorial waters, extending over blocks 6004/11, 12, 13, 16 & 17, bordering the UK and close to the major producing oil fields Foinaven and Schiehallion.
License 002 covers 214 square kilometers and, in addition to the potential extension of the Marjun discovery from the adjacent License 001, it contains a promising un-drilled structural lead, Orodruin, with significant reserve potential.
The License benefits from both 2D and 3D seismic coverage and the considerable data generated from the 2003 well. The first exploration well on License 002 was drilled in 2003 by Eni on a large stratigraphic prospect on behalf of the Eni/Faroe Petroleum joint venture but only encountered traces of hydrocarbons.
The term of the License currently extends to August 2006, and all work program obligations have been met.
License 002 lies near to the undeveloped Suilven discovery, which is in UK waters on the same structural trend as Orodruin. There have also been a number of discovery wells drilled on the UK side of the territorial boundary, including the latest announced discovery by Chevron on the Rosebank/Lochnagar prospect drilled in 2004. Several other exploration and appraisal wells are scheduled to be drilled on surrounding acreage in both the Faroes and the neighbouring west of Shetlands area in the near future.
The Company is also pleased to report the successful completion of its proprietary 2D long-offset seismic acquisition survey over the Freya field in License, operated by Faroe Petroleum. This is the first survey in an extensive seismic data program being acquired over 6 of the Company's Atlantic margin licenses this year.
Graham Stewart, chief executive of Faroe Petroleum commented:
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