Faroe Petroleum: Operating Profit, Production Increase

Faroe Petroleum revealed in its half year results statement an operating profit of $8.62 million (1H 2014: operating loss of $23.7 million) and an output of 10,971 barrels of oil equivalent per day (1H 2014: 7,592 boepd).

The company’s robust financial performance was said by Faroe to reflect the company’s higher revenue, lower operating expenditure per barrel of oil equivalent and lower exploration and appraisal costs. Faroe’s increased output was attributed to “good performance and high uptime” in the company’s main producing fields. The energy firm also stated in its half year financial results that its fully funded exploration and appraisal program is continuing as planned, with the offshore Norway Blink exploration well expected to spud in 2015. Two Barents Sea wells are scheduled to follow the Blink well.

Commenting on the company’s half year performance, Graham Stewart, Faroe Petroleum CEO, said in the firm’s results statement:

“I am pleased to report that Faroe Petroleum continues to be in robust health despite low oil prices, by virtue of our high quality and low cost production portfolio and prudent financial management, resulting in a strong cash position and low gearing. Production has been at an all-time high for the company and operating cost per barrel of oil equivalent of $22 at an all-time low. Our strong production performance and the addition of a new well on the Brage field mean that we are narrowing our production guidance to 9,000-10,000 boepd (previously 8,000-10,000 boepd).  

“The drilling program in 2015 has been very active, notably with exploration wells following the significant 2014 Pil and Bue oil discoveries. Preliminary results from Boomerang added to the company’s resource base and drilling is about to commence on the potentially significant Blink well, the final well in our 2015 program.

“Faroe’s consistent strategic focus, high quality portfolio and strong balance sheet have ensured that we are well placed to weather a long period of low commodity prices and take advantage of attractive growth opportunities.”

Faroe Petroleum’s narrowed production guidance for 2015 excludes the impact of the recently announced Roc GB acquisition, which will see Faroe increase its interests in the UK North Sea Blane and Enoch fields to 30.50 percent and 13.86 percent, respectively, for a payment that could total up to $20 million. If the deal is approved, production from the Blane field will be included in Faroe’s output reports from January 1, 2015. According to Roc’s website, Blane was discovered in 1989 and first production at the site occurred in 2007. The oil field produced 100,000 barrels of oil equivalent, and contributed six percent of Roc’s total production, in the first half of last year.


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