Faroe Petroleum: No Hydrocarbons at Blink, 2016 Exploration Decreased

Faroe Petroleum announced Tuesday that the Blink exploration well in the Norwegian Sea has shown no indications of hydrocarbons.

Well 6406/12-5 S reached a total vertical depth of 12,171 feet below sea level and preliminary analysis from wireline logs, pressure and fluid sampling shows that the well encountered clean water-wet sandstones with good reservoir properties, although no traces of oil and gas were present. The Blink well followed on directly from the Boomerang exploration well which encountered an 85 foot gross Upper Jurassic intra-Spekk/Rogn sandstone containing estimated recoverable resources of between 13 and 31 million barrels of oil equivalent.

Commenting on the result of the Blink well, Graham Stewart, chief executive of Faroe Petroleum, said in a company statement:

“Whilst the results of the Blink well, the last in this year’s campaign, are disappointing we look forward to advancing the options for monetizing the significant combined Pil, Bue and Boomerang discoveries, on which the Blink well result has no bearing.”

Following the failure of Blink, Faroe revealed that its total exploration program cost for next year is expected to be “significantly lower” than the 2015 program. The company’s drilling campaign will consist of one frontier exploration well in the Barents Sea and two near field exploration wells, one in the Norwegian North Sea and the other in the Norwegian Sea. The Dazzler well in the Barents Sea, which was previously expected to be drilled in 2016, has been pushed back to 2017. Work to accurately measure the recoverable resource ranges of Pil, Bue and Boomerang is expected to proceed, however.

Faroe’s production remains strong, averaging approximately 10,350 barrels of oil equivalent per day in the year to date. No significant shut down periods are expected in any of the company’s largest fields and, as a result, Faroe has increased its full year production guidance to between 9,500 and 10,500 boepd. Faroe’s balance sheet “remains strong with a significant cash position, low debt and good cash flow”, according to the company.

“Faroe Petroleum continues to perform very well despite continuing low oil prices, sector instability and some mixed exploration results. Faroe’s consistent strategic focus and prudent approach to financial management have ensured that we have a strong balance sheet, an excellent portfolio of exciting Norwegian exploration prospects, a valuable portfolio of pre-development projects, coupled with a strong performance from our producing fields. This positions the company well to take advantage of further good quality emerging opportunities,” Faroe's chief executive, Graham Stewart, said in a Faroe Petroleum statement.


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