Faroe Petroleum has provided an update on its Norwegian drilling activities. In line with the Company's strategy, Faroe has an exciting ongoing drilling program in Norway which in the near term includes three wells named Hyme, South East Tor and Grosso.
PL006D - Hyme - Faroe Petroleum 10%
Drilling has now commenced on the Norwegian License PL006C well 2/5-14 S (Faroe 10%), which holds the significant Hyme oil prospect. The Hyme exploration prospect is contained within a stratigraphic trap located on the western flank of the South East Tor discovery, which will be tested after the drilling of Hyme.
The drilling operation to be undertaken by the operator Lundin using the Maersk Gallant rig, is expected to take approximately 50 days.
PL006C - SE Tor - Faroe Petroleum 10%
The Lundin operated South East Tor appraisal well 2/5-14 A will be drilled directly following the drilling of the adjacent Hyme well, again using the Maersk Gallant rig, and is expected to take approximately 30 days.
The South East Tor oil discovery (2/5-3) lies in 67 meters of water within the Upper Cretaceous Tor and Ekofisk chalk formations and near the prolific producing reservoirs Ekofisk, Valhall and Tor fields. Well 2/5-3 was drilled in 1972 on the crest of a salt induced anticline. The well encountered oil in both the Tor and Ekofisk formations. and was successfully tested, with 43 degree API oil quality at 4,525 barrels of oil per day (bopd) from the Tor Formation and also 4,281 bopd from a separate test in the Ekofisk Formation.
South East Tor and Hyme are both located within tie-back distance of a number of potential production hosts in the area.
PL 376 - Grosso - Faroe Petroleum 10%
The drilling of the substantial Grosso exploration prospect is scheduled to commence shortly and will be drilled by the operator StatoilHydro using the Ocean Vanguard rig. This licence is located on the North East flank of the North Viking Graben and multiple prospects have been identified in both structural and stratigraphic closures, with Jurassic and Lower Cretaceous reservoir objectives. No wells have been drilled on the Licence, despite being located immediately north of the Jurassic gas/oil Gjoa Field and south of the undeveloped Cretaceous Agat gas discovery.
The drilling operation to be undertaken by the operator StatoilHydro using the Ocean Vanguard rig is expected to take approximately 70 days.
Graham Stewart, Chief Executive of Faroe Petroleum, commented, "As a key part of our continuing forward drilling program, we have an exciting and busy period of drilling activity ahead of us in Norway. With the favourable Norwegian tax regime, under which 78% of exploration expenditure is repaid to us in the following year, Faroe is in an excellent position to realize the value of Norwegian exploration and appraisal assets with minimum cost exposure.
"The Company recently doubled to NOK 500 million (approximately £47.5 million) its Revolving Credit Facility with Barclays and the Bank of Scotland, on excellent terms, for financing exploration and appraisal activity Norway. This facility will be drawn upon to pay the majority of costs on all our Norway wells going forward, thereby conserving the Company's equity capital."
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