30th Nov 2007 14:49
Faroe Petroleum PLC30 November 2007 30 November 2007 Faroe Petroleum plc ("Faroe Petroleum", "Faroe" or the "Company") Acquires Cross Border Package of Shell Assets Comprising Interests in NorwegianExploration and Development Assets and the William Licence in the Faroe Islands Faroe Petroleum, the independent oil and gas company focusing principally onexploration in the Atlantic Margin, the North Sea and Norway, is pleased toannounce that it has agreed a cross-border package transaction with Shell. Thetransaction, which is in line with the Company's stated strategic objectives ofAtlantic Margin and Norway exploration drilling and asset portfoliodiversification 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 licence. Faroese Licence L007 William (Faroe 5%) The William oil prospect is a high risk/high reward exploration opportunitywhich lies within Faroes Licence 007. Joint venture partners in the licence areBP (50% and operator), Shell (20%) and Anadarko (25%). The main reservoirobjective in William is in the Palaeocene and is located towards the flank of aknown basalt sequence, approximately 20 kilometres north west of the "Longan"exploration well (drilled by BP in 2001), which encountered thick reservoirquality sandstones in multiple objectives. Drilling of the well commenced on 22 October 2007 using the Transocean Rather,following its appraisal programme recently completed for Chevron on the RosebankLochnagar discovery West of Shetlands. The rig is located in water depth of 780metres. The results of the well are expected to be known in the first quarter of2008. Faroe has agreed to farm in for a 5% interest, with a cap on its cost exposurewhereby, depending on the well results, Faroe can elect to pay its share of anyfurther costs in cash or by reducing its equity participation. Norwegian Licence PL147 Trym (Faroe 10%) The Trym gas and condensate field is located in Norway approximately 7kilometres from the Harald platform across the border in Denmark, in 67 metreswater depth. Shell is currently operator with a 50% interest, and the otherjoint venture partners are Bayern Gas (30%) and DONG (20%). The Trym discovery well 3/7-4 drilled in 1990 tested gas and condensate from theMiddle Jurassic reservoirs at rates of 29.6 million standard cubic feet per day(mmscfd) and 3800 barrels per day (bbls/d), respectively. The Jurassic Reservoiris composed of two distinct formations, the Lindesnes and Bryne. The base casegas reserves for the field is 120 billion cubic feet (bcf) (12 bcf net to Faroe)and condensate reserves of 4.7 million barrels (mmbbls) (0.47 mmbbls net toFaroe). The licence also benefits from several additional prospects withpotential for tie back for development. The Trym field development plan submitted by Shell to the Norwegian authoritiesin 2006 (FDP 2006) involved a horizontal tri-lateral sub-sea completion whichallowed for two horizontal wells, with a tie-back to the Harald platform inDenmark, and onwards into the European gas transmission network. The FDP 2006was not approved by the Norwegian Government. Since then StatoilHydro has soldits 30% interest in Trym to Bayern Gas and Shell has indicated its intention tosell down its entire 50% interest including operatorship. It is expected thatfollowing the assignment of operatorship and a subsequent period to review theproject and the commercial agreements, a revised FDP will be submitted to theNorwegian authorities Norwegian Licence PL381 Granat (Faroe 10%) The Granat SHAPE /* MERGEFORMAT Licence PL381 was awarded to Shell (70% andoperator) and DONG Norge (30%) in the APA 2005 licencing round. The licencecovers an area of 116 square kilometres and includes part blocks 6407/5 and 6407/8 and is located 15 kilometres to the northwest of the Draugen Field and 30kilometres east of the recent Onyx South West discovery, both of which are alsooperated by Shell. In the vicinity there have been three recent nearby discoveries (Tott East, OnyxSouth West and Njord North West flank) and five further wells are to be drilledin the area by 2010. The Middle Jurassic Granat Prospect is the primary targetof the PL381 licence. Granat is a large prospect within a proven petroleumsystem, located in an area of the Norwegian Shelf that is being activelyexplored, with recent success. A drill or drop decision is required under thelicence before 6 January 2009. Completion. Completion of the transaction is subject to the consent of both Ministry ofTrade 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 Petroleumwith a high impact exploration well drilling right now in the Faroe Islands,together with another high potential exploration prospect and a very attractivenear-term gas field development in Norway. These new interests in our coreareas further boost the Company's work programme and shareholders' exposure tosubstantial value creation in the portfolio." Ends Enquiries: Faroe Petroleum plc Graham Stewart Tel: 01224 652 810 [email protected] Panmure Gordon Katherine Roe Tel: 020 7459 3600 [email protected] Financial Dynamics Jonathon Brill/Billy Clegg/Edward Westropp Tel: 0207 269 7157 [email protected] Note Andrew Roberts, who is a Geophysicist (BSc. Joint Honours in Physics andChemistry from Manchester university), exploration manager of Faroe PetroleumNorge AS and who has been involved in the energy industry for more than 25years, has read and approved the technical disclosure in this regulatoryannouncement. Notes to Editors The Company is actively building a balanced portfolio of operated andnon-operated exploration and appraisal properties, with significant stakes andan active work programme. Faroe Petroleum has through successive licenceapplications and acquisitions built a substantial portfolio of exploration andappraisal assets in the Atlantic Margin, the UK and Norwegian North Sea andNorwegian Sea. The 34 licence portfolio provides considerable spread of risk andreward, encompasses eight licences West of Shetlands, five licences offshore theFaroe Islands, seven licences in the Moray Firth area of the UK Central NorthSea, seven licences in the Southern gas basin and seven licences in theNorwegian North Sea and Norwegian Sea. The Company operates five of its AtlanticMargin licences and four of its North Sea licences. Faroe Petroleum jointventure partners include BP, Chevron, ConocoPhillips, DONG, DSM, Eni, E.ONRuhrgas, GDF, Oilexco, OMV, RWE, Shell and Statoil all of which have anoutstanding track record in oil and gas exploration and development. Faroe Petroleum is quoted on the Alternative Investment Market (AIM) of theLondon Stock Exchange and has its headquarters in Aberdeen, UK. Faroe Petroleumhas a highly experienced team of professionals focused on creating exceptionalvalue for its shareholders. The company recently enhanced its capability throughthe establishment of a new Norway based team in Stavanger, designed tocapitalise on the significant opportunities in that region; most of this newteam joined Faroe from Paladin Resources Norge following Paladin's acquisitionby Talisman in 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Faroe Petroleum Plc