Faroe in Cross-Border License Swap with Shell

Faroe Petroleum has agreed to a cross-border package transaction with Shell. The transaction, which is in line with the Company's stated strategic objectives of Atlantic Margin and Norway exploration drilling and asset portfolio diversification involves the following:

- the farm-in to the Faroe Islands high risk/high reward William exploration well;
-the acquisition of a 10% interest in the Norwegian Trym undeveloped gas field; and
- the acquisition of a 10% interest in the Norwegian Granat exploration license.

Completion of the transaction is subject to the consent of both Ministry of Trade in the Faroes, the MPE in Norway, and all joint venture parties.

Graham Stewart, Chief Executive of Faroe Petroleum, commented:

"This is a further exciting cross-border package transaction for Faroe Petroleum with a high impact exploration well drilling right now in the Faroe Islands, together with another high potential exploration prospect and a very attractive near-term gas field development in Norway. These new interests in our core areas further boost the Company's work program and shareholders' exposure to substantial value creation in the portfolio."