Faroe Cites Active Drilling Program, Strong Production Growth in 2008
Faroe Petroleum has announced its unaudited Interim Results for the six months ended June 30, 2008.
- Turnover of £0.7 million (June 30, 2007: £0.1 million) from gas production.
- Loss of £0.3 million (June 30, 2007: loss of £0.6 million).
- Cash of £41.9 million (June 30, 2007: £29.7 million).
- Revolving credit facility increased to NOK 250 million to fund Norway exploration.
- Secured £25 million debt facility for financing field development.
- Program of more than 20 wells fully financed.
Value Enhancing Strategy
- Create a diversified portfolio of exploration, appraisal, development and production assets across the Atlantic Margin, North Sea and Norway.
- Participate in an active and material portfolio drilling program to maximize the probability of success (fully funded drilling program of over 20 wells).
- Balance the Company's financial exposure in any well relative to its upside potential.
- Develop portfolio of tax efficient production assets for near-term cash flow.
Very Active Period
- First exploration wells on William and Yoda unsuccessful, but prospectivity remains on licenses.
- Appraisal drilling underway on Topaz, and exploration on East Breagh and Marsvin.
- First production from Wissey gas field commenced in August - on prognosis.
- New, independently evaluated, resource estimates published.
- Cross assignment with Petro Canada for interest in Fat Cat prospect, UK North Sea.
- Acquisition of interest in South East Tor oil discovery and Hyme exploration in Norway.
- Swap with DONG of interests in Glenshee for Glenlivet, West of Shetlands.
- Successful awards of 5 new licences in Norway in strong partnerships.
- Farm-in to UK North Sea Fulmar L prospect for 10% stake with drilling underway.
- Rolling drilling program for next two years, including eight further wells through to the year end.
- License Round awards UK, Norway and Faroes scheduled for Q4 2008 and Q1 2009.
- Trym and Orca gas field developments expected to be approved by authorities this year.
- Number of further opportunities being pursued to enhance program and portfolio value.
Graham Stewart, Chief Executive, commented, "The Company continues to make good progress in the development of its portfolio, with one of the most active drilling programs in the AIM sector and a growing production base to provide increasing financial sustainability. We have added further near term wells to the fully funded drilling schedule and new prospects are being actively matured for future drilling. The Company remains financially strong and focused on its clear strategy of participating in a sustainable multi-well program balancing risk and reward to deliver substantial shareholder value."
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