Faroe Petroleum has announced the swap with DONG E&P Norge AS of its interest in the Trym development for a combination of cash and interests in the producing Glitne and Enoch oil fields.
Under the terms of this transaction, Faroe will exchange its 10% interest in the Trym development for:
Faroe acquired the 10% interest in Trym in 2007 as part of a cross-border package transaction with Shell. Trym is an undeveloped gas field located close to the Norwegian-Danish border. For commercial reasons the Field Development Plan submitted in 2006 was not approved by Norwegian Authorities. In anticipation of these commercial issues being resolved, DONG Energy, the new field operator, submitted a revised Field Development Plan in October last year, which is expected to be approved soon.
The Glitne oil field was brought on stream in 2001 and has been developed with sub-sea completed wells tied back to the leased FPSO facility Petrojarl 1. Oil is transported to shore by offshore tanker loading. Production was originally expected to last for around three years, but a combination of better than expected performance and in-fill drilling has resulted in extended field life. Current gross production is at around 7,000 bopd corresponding to a net production to Faroe of around 650 bopd. A new seismic survey was acquired last year to identify remaining oil and possible new in-fill well locations on Glitne, and the 4D seismic interpretation is under way.
The Enoch oil field is located close to Glitne on the UK/Norway median line. The field was developed by Paladin Resources (acquired by Talisman Energy in 2005) and came on stream in May 2007. It produces via a single sub-sea well, tied back to the Marathon-operated Brae 'A' platform, 14 kilometers to the west. The field has been delivering at stable rate of around 8,000 bopd during 2008 after the introduction of gas lift towards the end of 2007. Enoch will contribute approximately 150 boepd net to Faroe with potential for increased production with further field investment.
Graham Stewart, Chief Executive of Faroe, commented, "We are very pleased with this transaction, which provides cash and oil production revenues in Norway, freeing up Faroe's equity reserves and significantly undrawn debt facility for other purposes.
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