The development plan for Minke Main is for a single sub-sea well, tied back to the existing D15 platform facilities located offshore Holland, and operated by GDF Production Nederland B.V., with first gas expected to be produced in the first half of 2007. Net reserves attributable to Faroe Petroleum in respect of Minke Main are estimated to be 2.45 billion cubic feet of gas. Gross development costs for Minke Main are estimated at £45 million with a net cost to Faroe of £2.65 million over two years.
Minke Main is one of three undeveloped gas field discoveries, recently acquired by Faroe Petroleum from ConocoPhillips as a package of license interests. The other two undeveloped assets in the package are the nearby Minke Graben and Orca gas fields upon which development decisions are anticipated in 2007. The Minke Graben and Orca gas fields offer considerable additional reserve potential and value to Faroe Petroleum as and when decisions are taken to proceed with their development.
The assets are situated in UK Blocks 44/24a,29b and 30 (Faroe's interest 5.89%), approximately 25 kilometers east of the producing Caister-Murdoch gas fields and 13 kilometers south west of the GDF Production Nederland B.V. operated D15 platform in the Dutch sector. In addition, there is the potential for the undeveloped fields to extend over the UK border into Dutch waters with the possibility of additional reserves within Dutch Block D15b (Faroe 5%). Attractive exploration potential exists across the blocks, including nearby Dutch Block D18a (Faroe 2.5%). Field partners in the UK are the European utility companies E.ON Ruhrgas (42.67%), RWE Dea (35.84%), GDF Britain Ltd (15.6% and Operator).
Faroe Petroleum's 11 license North Sea oil and gas portfolio is designed to complement the Company's significant 11 license Atlantic Margin portfolio, by focusing on opportunities close to existing production infrastructure, with potential to generate early cash flow.
Graham Stewart, Chief Executive of Faroe Petroleum, commented:
"I am delighted that Faroe Petroleum is now participating in this well. This exciting project, commencing less than three months after acquisition, is the first of three expected gas field developments in our North Sea portfolio. Minke Main will provide Faroe Petroleum with greater tax efficiencies and cash flow to better support our exploration and appraisal strategy focused on the Atlantic Margin, the North Sea and Norway. With first gas from Minke Main anticipated for first half 2007, we look forward to the beginning of an exciting new growth phase for our company."
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