Faroese Petroleum Authority Approves Drilling Program on License 006

Mr. Bjarni Djurholm, the Minister of Trade and Industry, has signed an agreement with the license holders of License 006 with Statoil as operator that facilitates the drilling of a sub-basalt exploration well on the Brugdan prospect.

The agreement is a result of negotiations between the licensees of Licenses 001 and 003 and the Faroese Petroleum Administration whereby the new commitment to drill on License 006 is undertaken in lieu of the existing well commitments of Licenses 001 and 003.

After the outcome of the Longan well drilled on License 003 and the Marjun well on License 001 both in 2001, the companies have concluded that the prospectivity of these Licenses has been reduced and that the remaining commitments would be better utilized elsewhere within the Faroese License area. Although hydrocarbons were discovered in the Marjun well the commerciality is considered not to be sufficient based on available knowledge.

Final interest in License 006 will be Statoil 27.15%, DONG 21.91%, Anadarko 13.00%, Enterprise Oil (Shell) 12.47%, Amerada Hess 11.09%, BG Group 10.31%, Faroe Petroleum 4.04% and Atlantic Petroleum 0.03%.

The Petroleum Administration is pleased that an agreement has been reached to drill this important exploration well. The well will test a large anticlinal structure at a sub-basalt level that will provide crucial geological information for the benefit of future exploration and which in a success case can hold significant amounts of hydrocarbons.

The License 006 Group has contracted the Stena Don semisubmersible rig, currently on long term contract with Statoil in Norway, to drill the well in the summer of 2006.

Bjarni Djurholm, Minister of Trade and Industry, is delighted that agreement now has been reached on the second sub-basalt well and that these important wells will be drilled within the next two years. The Minister says that "these undertakings provide for continued exploration activity and fit well with our overall strategy initiated with the second licensing round which is to provide for more exploration acreage, attracting new companies and to obtain synergy effects with developments west of Shetland."

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