Faroe Petroleum, the independent oil and gas group focused on managed portfolio exploration in the Atlantic Margin, Norway and the North
Sea, announces its unaudited Interim Results for the six months ended June 30, 2009.
- Significant Atlantic Margin gas discovery in Glenlivet exploration well, September 2009
- Successful sale of Breagh project, realising £25.5m from investment of £8.8m, completed August 2009
- Swap of Trym field development for cash of up to £4m plus interests in Glitne and Enoch producing oil fields -- completion expected in Q4 2009
- Production from 3 gas fields and 2 oil fields (Glitne and Enoch - post Trym swap), approximately 1,500 boepd
- Awarded prestigious Barents Sea licence, in Norway 20th Round (with BG, Statoil and Wintershall) in May 2009 -- our 18th license in Norway
- Topaz field development approved in February 2009
- Cash of £11.5m (December 31, 2008: £16.7m). Cash balance at August 28, 2009 of £37m including Breagh proceeds
- Continued access to seven year £25m borrowing base facility, of which £4m drawn
- Continued access to approximately £50m revolving credit exploration finance facility for Norway, of which £40m drawn
- Turnover of £2.9m (30 June 2008: £0.7m)
- Loss of £4.2m (30 June 2008: £0.3m) including write-offs of exploration expenditure
- Norway tax receivable of £38.3m (31 December 2008: £30.5m) -- of which £29.0m is due in December 2009 Strategy
- Focused, sustainable and high potential value drilling program with material equity stakes
- Drilling targets from portfolio of over 45 licenses, held mainly with major oil companies
- Managed use of portfolio and production revenues with treasury and tax optimization to ensure delivery of an active, high potential value exploration portfolio
- Appointments of Iain Lanaghan as Group Finance Director and Tim Read as Senior Independent Non-Executive to strengthen the Board
- Exciting drilling program with 9 firm, fully funded wells scheduled over coming two years, including 4 in Norway and 5 in the Atlantic margin, with the Tornado well scheduled to commence soon
- Topaz gas field (UK) scheduled to come on stream in Q4 2009
- Strong balance sheet providing a solid base for significant program expansion and growth in portfolio value
Graham Stewart, Chief Executive, commented, "We have had an excellent year to date, with significant exploration success in the Atlantic margin in the Glenlivet discovery and subsequent appraisal during September, and a number of innovative transactions including the sale of our stake in the undeveloped Breagh gas field for $41.6m and the swap of our interest in the undeveloped Trym gas field for producing Enoch and Glitne oil field interests and cash, both of which occurred in the second half of the year.
"Faroe Petroleum has built an outstanding portfolio of assets, combining high potential exploration and appraisal opportunities with a growing production base. We have a strong balance sheet and a firm, fully funded, nine well program. The Company has entered a very exciting period in its development, with several high impact wells lined up for drilling and a team confident of delivering substantial value to our shareholders."