Faroe has reached an agreement, subject to approval from the Norwegian authorities, to increase its interest from 20 to 40% and obtain the operatorship of Norwegian license PL440S. A well has been committed on the PL440S license, which will target the Clapton prospect and is expected to be drilled in late 2011 or early 2012. The license co-venturers are Det norske oljeselskap (whose stake decreases from 30% to 10%, and is current operator), Norwegian Energy Company (12%), Lundin (18%) and Dana (20%).
This APA license, awarded in 2006, is located in a very prolific area close to the giant oil fields Ekofisk, Valhall and Eldfisk, which contain 6 to 7 billion barrels of oil equivalent (boe) reserves. The license is situated on the eastern edge of the Lindesnes Ridge 25 km away from Faroe Petroleum's PL006C South East Tor discovery.
The Clapton prospect is formed on the edge of a salt induced structure referred to as the Mode Dome which was previously explored in the 1980s. The main targets in the structure are the Upper Cretaceous Hod, Tor and Ekofisk formation, which is a proven reservoir in the Central Graben both in Norway and UK and contains good flow properties through the matrix as well as secondary fracture network development.
In May 2010, the Clapton joint venture partners committed to drill the Clapton prospect, planned for late 2011 or early 2012, and Faroe Petroleum has entered into an agreement with Det norske oljeselskap to acquire a further 20% interest in this license on promoted terms, increasing its stake to 40% and taking over as license operator. The agreement is subject to the approval of the Ministry of Petroleum and Energy in Norway.
Graham Stewart, Chief Executive of Faroe Petroleum, commented, "We are very pleased to announce the commitment to drill the exciting Clapton prospect, and with an increased stake. This prospect is another identified by Faroe Petroleum and won through the APA licensing round process. We are also pleased to have the opportunity to take on operatorship of our first Norwegian license following pre-qualification as operator earlier this year."
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