Faroe Petroleum plc Announces Gas and Condensate Discovery at Solberg Well in the Norwegian Sea
Apr 10 14
Faroe Petroleum plc announced a gas and condensate discovery in the Solberg well in the Norwegian Sea (Faroe 20%). Exploration well 6407/1-7 and the subsequent sidetrack 6407/1-7A have encountered gas and condensate in the main target lower Cretaceous Lange formation, both confirming hydrocarbons at the same reservoir level as in the Rodriguez discovery well. In exploration well 6407/1-7, two hydrocarbon-bearing sandstone layers were encountered in a gross reservoir section estimated at 16 metres and with a total net interval of 12 metres. Reservoir properties were found to be better than expected. In the down-dip sidetrack well 6407/1-7A, hydrocarbons were proven in two sandstone intervals with total net thickness of seven metres within a gross reservoir section estimated at 13 metres. The preliminary resource estimate for the Solberg discovery within PL475 is in the range 6 to 25 mmboe gross (Net to Faroe 1 to 5 mmboe), which consists of 1 to 5 million barrels of condensate and 30 to 120 bscf of gas. In addition, the revised preliminary resource estimate for the Rodriguez discovery within PL475 is in the range 6 to 38 mmboe gross (Net to Faroe 1 to 8 mmboe). The gas condensate ratio is expected to be similar in both Rodriguez and Solberg. Although Solberg and Rodriguez form part of one and the same reservoir channel system, a difference observed in the reservoir pressures between the two wells indicates that the two discoveries may not be in communication and the volumes for the two discoveries are therefore provided separately. The Rodriguez and Solberg gas and condensate discoveries have been made in channel systems which are likely to extend across several licences and northwards into the Milagro licence (PL590) in which Faroe holds a 30% interest; the possible extension of the discoveries beyond licence PL475 has not been included in the above resource range estimates.
Faroe Petroleum plc Announces Successful Drill Stem Test on the 6406/12-3S Pil Exploration Well from the Njord Production Facility in the Norwegian Sea
Apr 10 14
Faroe Petroleum plc announced a successful Drill Stem Test (DST) on the 6406/12-3S Pil exploration well (Faroe 25%), drilled 33 kilometres from the Njord production facility (Faroe 7.5%) in the Norwegian Sea. The well flowed at a stable rate of 6,710 bopd of 37° API oil from a 56/64" choke providing clear evidence of a prolific reservoir; The preliminary estimated range of recoverable resource, from the results of the initial exploration well, is between 50 and 170 million barrels of oil equivalent (mmboe) - significantly greater than expected; A sidetrack well is to be drilled immediately following completion of the DST to appraise the lateral extent of the Pil discovery; A second sidetrack well to test further prospectivity in the neighbouring Bue target is also being planned in immediate succession. An extensive data acquisition programme was carried out in the 6406/12-3S well, including the gathering of core together with a full suite of wireline logs and a DST. During the recently completed DST the measured main period stable flow rate was 6,710 bopd from a 56/64" choke. Pressure measurements indicate a prolific reservoir capable of sustainably higher flow rates from future development wells than were achieved in the constrained DST. The site sampling of the fluid produced during the DST indicates the presence of 37° API oil with a gas/oil ratio of 853 scf/stb, to be confirmed by onshore laboratory testing. A preliminary estimate of recoverable resource for the gross size of the discovery, from the results of the initial exploration well, is between 50 and 170 mmboe (Net to Faroe 13 to 42 mmboe), of which between gross 8 and 20 mmboe (45 to 114 Bscf) is contained in the gas cap (Net to Faroe 11 to 29 Bscf). VNG Norge AS, operator of Production Licence P586, will now commence a sidetrack to prove the lateral extent of the Pil discovery. This will be immediately followed by a further sidetrack to assess the potential of the neighbouring Bue target. Both sidetracks have the potential to increase the preliminary estimate of recoverable resource of the discovery. The Pil licence drilling operations are being operated by VNG Norge AS (30%) using the Transocean Arctic drilling rig with partners Spike Exploration Holding AS (30%) and Rocksource Exploration Norway AS (15%).
Faroe Petroleum plc Announces Audited Preliminary Group Earnings Results for the Year Ended December 31, 2013 and Cash Flow Results for the Year Ended December 31, 2013
Mar 25 14
Faroe Petroleum plc announced audited preliminary group earnings results for the year ended December 31, 2013 and cash flow results for the year ended December 31, 2013. For the year, the company’s revenue was £129,387,000 against £158,792,000 a year ago. This represents a 19% decline compared to 2012 revenue, predominantly due to Njord and Hyme being shut-in since July 2013. Operating profit was £20,971,000 against operating loss of £25,583,000 a year ago. Profit on ordinary activities before tax was £10,024,000 against loss on ordinary activities before tax of £28,991,000 a year ago. Profit for the year attributable to equity holders of the parent was £14,074,000 or 6.6 pence per basic and diluted share against loss for the year attributable to equity holders of the parent of £5,178,000 or 2.4 pence per basic and diluted share a year ago. The improved profit before and after tax year-on-year is due primarily to the lower exploration write-offs in the year ended December 31, 2013. Net cash generated from operating activities was £118,940,000 against £77,164,000 a year ago. Purchases of intangible and tangible assets were £121,990,000 against £162,052,000 a year ago. Exploration and evaluation expenses for the year were £22.2 million compared to £79.7 million a year ago. This includes pre-award exploration expense was £6.9 million and write-offs of license-specific exploration and evaluation expenditure on previously capitalized licenses where active exploration has now ceased was £15.4 million.
For the year, the company’s net cash used in operating activities was £2,852,000 against £2,264,000 a year ago. Purchases of property, plant and equipment was £34,000 against £111,000 a year ago. The decrease in revenue was predominantly due to Njord and Hyme being shut-in since July 2013. The improved profit before and after tax year-on-year is due primarily to the lower exploration write-offs in the year ended 31 December 2013.