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Faroe Petroleum gets double boost with appraisal success and field development green light

Published: 17:23 10 Apr 2018 AEST

oil and gas operations
The Fogelberg will be tested for productivity ahead of a resource estimation

Faroe Petroleum plc (LON:FPM) had a double boost on Tuesday as two separate projects saw success.

An appraisal well on the Fogelberg discovery has confirmed the anticipated reservoir sequence and also measured better reservoir quality than seen in the original discovery.

The well will now be tested to confirm well and reservoir productivity. Resource estimates will then follow.

Faroe is in the spotlight following high profile stake building, with repositioning Norwegian firm DNO taking a 27% position in the company last week.

READ: DNO quickly builds a stake in Faroe

Elsewhere, the growing offshore oiler secured approval from the Norwegian authorities for the development of the Fenja field – which is located 33 kms from the Njord production facility and will comprise three producing wells and three support wells (injecting water and gas).

Faroe effectively retains a 7.5% stake in Fenja, following a farm-out deal in February which will see the company receive US$54.5mln for a 17.5% stake. Today’s approval is expected to rubber stamp the partial sale, as it was the remaining condition to the transaction.

Fenja is operated by VNG Norge and it is estimated to host some 97mln barrels of recoverable oil equivalent resources, giving it an estimated 16 year field life.

“When Fenja comes on stream in 2021 it will contribute considerable cash flow and value to Faroe,” said Graham Stewart, Faroe chief executive.

“Fenja is another prime example of Faroe's successful exploration model which continues to deliver considerable success and value - most recently with the announcement last week of the significant Iris/Hades discoveries in the Norwegian Sea.”

Stewart added: “Faroe now has the distinct advantage of being in a fully-funded position, with clear line of sight to deliver material organic production and value growth.

“We are continuing to pursue actively our significant exploration, appraisal and infill drilling programme with the aim of adding greater near term resource and value.

“Opportunities to accelerate further growth through potential value-accretive acquisitions and disposals also continue to be a key focus for the company going forward.”

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