Faroe Petroleum announced that drilling has been completed on the Norwegian License PL376 (Faroe 10%) on the high risk/high reward StatoilHydro-operated Grosso exploration prospect.
The primary objective of the well was to explore for hydrocarbons within Lower Cretaceous reservoirs. This is the first well to be drilled on the License, which is located immediately north of the Jurassic gas/oil Gjoa Field and south of the undeveloped Cretaceous Agat gas discovery. The well found good reservoir rocks, but unfortunately did not encounter movable hydrocarbons.
License partners are:
The drilling operation was undertaken by the operator StatoilHydro using the Ocean Vanguard rig and was completed well within budget and without any HSE incidents.
Graham Stewart, Chief Executive of Faroe Petroleum, commented, "Although results for the Grosso exploration well were disappointing, it was an attractive high impact opportunity and the license still holds a number of additional promising prospects which we hope, through our minority 10% holding, to benefit from in due course.
"Faroe's share of drilling costs qualifies for 78% tax rebate under Norway's fiscal system, designed to encourage exploration. The Company has a NOK 500 million revolving credit facility with Barclays Bank and the Bank of Scotland, for financing exploration and appraisal activity in Norway, which was utilized in this instance, thereby conserving the Company's equity capital."
"We remain committed to our ongoing fully funded drilling program in Norway, West of Shetland and Faroe, and believe that through our extensive portfolio of assets we have a significant number of good quality exploration prospects with considerable resource and value potential."
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