12th May 2014 09:13
LONDON (Alliance News) - Faroe Petroleum PLC Monday said drilling has reached its target depth on the 8/10-5S exploration well and 8/10-5A appraisal wells in the Norwegian North Sea but has failed to find hydrocarbons.
The oil and gas company, with operations in Norway, the Atlantic margin and the North Sea, said the two linked wells were the first of two back-to-back wells in the PL405 Licence, which is part owned by Centrica PLC and Tullow Oil PLC, following its 2011 Butch Main discovery.
The company said the Butch East exploration well started drilling on December 29 and reached a total depth of 2,307 metres, it targeted sandstones of an Upper Jurassic reservoir and, although it found a good quality reservoir, no hydrocarbons were encountered at the region.
The Butch East drilling programme is being carried out by Centrica Resources Norge AS, a subsidiary of Centrica PLC, together with Faroe's other joint venture partners Suncor Norge AS and Tullow Oil Norge AS, a subsidiary of Tullow Oil PLC. Faroe said the 8/10-5S site will now be plugged and abandoned.
The company said Centrica is currently working on a development plan for the Butch Main discovery, in parallel with drilling follow-up prospects at Butch East and Butch South West.
The news comes weeks after Tullow Oil announced that it was pushing ahead with the sale of its UK gas assets in the southern North Sea, selling stakes in two assets, Schooner and Ketch, to Faroe Petroleum PLC for up to USD75.6 million, plus a royalty on developments at one of the assets.
The deal is expected to nearly double Faroe's production this year and marks the company's first move into operating assets already in production.
Faroe Petroleum shares were down 6.7% to 138.75 pence, putting it in the top AIM ALL-Share fallers Monday, while Centrica shares were down 0.6% to 316.63 pence and Tullow Oil shares were down 0.2% to 896.50 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Tullow OilCentricaFaroe Petroleum Plc