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Faroe Petroleum announces operational update and 2018 guidance
13 Feb 2018
Faroe Petroleum, the independent oil and gas company focussing principally on exploration, appraisal and production opportunities in Norway and the UK, has provided an update on operations and guidance for 2018.
- 2017 average production of 14,300 boepd at the upper end of 2017 guidance
- 2018 production is expected to be in the range of 12,000 to 15,000 boepd
- 20% increase in 2P reserves to 97.7 mmboe at year-end following the successful Brasse appraisal well in 2017 and after adjusting for the Fenja transaction announced yesterday (1). Year-end 2C resources are 78.6 mmboe, as adjusted for Fenja
- Fully funded for Brasse and ongoing development projects: Oda; Njord Future; Bauge and Fenja, following the divestment of 17.5% of Fenja
- High quality E&A drilling programme under way for 2018 with two wells already drilling: Iris/Hades and Fogelberg and with three further wells added: Rungne, Cassidy and Pabow
Graham Stewart, Chief Executive of Faroe Petroleum commented:
'2017 has been another very good year for Faroe with strong operational performance enhanced by a general recovery in commodity prices and market sentiment. A highly successful appraisal well on our Brasse oil and gas discovery in Norway and its conversion to 2P reserves, combined with positive reserves revisions in Ula and Tambar led to Faroe's highest ever recorded year-end 2P reserves at 97.7 mmboe, an increase of 20% even after adjusting for the reduced interest in Fenja announced yesterday. The Tambar production project commenced last year and the two infill wells have now been drilled and early results are very positive showing good potential for increased production with the new wells expected on stream during February.
'We announced yesterday that we have agreed a part-disposal of 17.5% of Fenja to Suncor, reducing our working interest from 25% to 7.5%. As well as generating an immediate cash consideration of $54.5 million, this will decrease our future capex on Fenja from an estimated £232 million to approximately £70 million. As a result, and with our existing cash position and unused debt, we are now fully funded for the operated Brasse project, which remains uncommitted at this stage, as well as our committed and ongoing Norwegian development projects.
'As we embark on another very busy year for the business, Faroe is again well positioned to capture the growth opportunities which we continue to generate from our balanced portfolio of development and exploration and appraisal opportunities, backed by our sustainable and increasingly cash generative production base.'
(1) as adjusted for sale of a 17.5% interest in Fenja
Source: Faroe Petroleum