Faroe Petroleum Audited Preliminary Results for 2013

Faroe Petroleum, an independent oil and gas group focused on oil and gas exploration and production in Norway, the Atlantic margin and the UK North Sea, announced today its audited Preliminary Results for the year ended 31 December 2013.

2014.03.25 - Faroe Petroleum Audited Preliminary Results for 2013

A summary of these results is highlighted below:

Exploration and appraisal

High impact exploration drilling programme

  • Rodriguez gas condensate discovery (Faroe 30%), Norwegian Sea announced in January 2013
  • North Uist gas condensate discovery (Faroe 6.25%), West of Shetland announced in April 2013 – not expected to be commercial on a standalone basis
  • Darwin well (Faroe 12.5%), Barents Sea, Norway announced as dry in April 2013
  • Snilehorn significant oil discovery (Faroe 7.5%), Norwegian Sea announced in November 2013
  • Novus oil and gas discovery (Faroe-operated, 30%) Norwegian Sea announced in January 2014 – not expected to be commercial on a standalone basis
  • Pil oil and gas discovery (Faroe 25%), Norwegian Sea, announced in March 2014. Production test underway ahead of potential side-track well

Exploration and appraisal portfolio

  • Awards of 11 new Norwegian exploration licences: 1) One frontier licence in the 22nd Norwegian Licence Round in the Barents Sea (operated by Eni, with a firm well commitment, Dazzler, targeted for late 2015). 2) 10 licences in Norwegian APA 2013 Round (three of which are operated by Faroe)
  • Acquired 25% interest in Pil prospect (Norway) – discovery announced in March 2014

Reserves, production and development

Significant growth in reserves and resources during the year

  • 2P reserves at 1 January 2014 estimated by Faroe at 27.2 mmboe – an increase of 35% over the year
  • Unrisked contingent resources at 1 January 2014 estimated by Faroe at 73 mmboe – an increase of 32% over the year

Production and development portfolio

  • Hyme oil field (Norway, Faroe 7.5%) and Orca gas field (UK, Faroe 3.24%) brought on stream
  • East Foinaven oil field (UK – Faroe 10%) acquisition completed in August 2013
  • Average economic production (including East Foinaven from 1 January 2013) of approx. 6,059 boepd in the year (2012: approx. 6,900 boepd). Production, excluding pre-completion production from East Foinaven, was 5,871 boepd
  • Production in the year impacted by the shut-in of Njord and Hyme fields for most of 2H 2013 – production re-start scheduled for summer 2014 following reinforcement work on Njord A facility
  • Acquired 100% of undeveloped Lowlander oil field, near undeveloped Perth oil field (UK)


  • Revenue £129.4 million (2012: £158.8 million)
  • EBITDAX £80.5 million (2012: £96.3 million)
  • Profit after tax £14.1 million (2012: £5.2 million loss) – after exploration write-offs of £15.4 million (2012: £71.1 million)
  • Pre-tax exploration and appraisal investments £73.0 million (2012: £111.8 million) – post-tax investment £24.9 million (2012: £35.5 million)
  • Development and production investments £48.5 million (2012: £49.3 million)
  • Net cash £40.6 million (31 December 2012: £65.5 million)
  • Norwegian tax receivable of £23.9 million (31 December 2012: £48.5 million, received in December 2013)
  • Unrelieved carried forward UK tax losses of £77.9 million (31 December 2012: £75.4 million)
  • Reserve Based Lending facility of US$250 million undrawn at 31 December 2013 Outlook
  • Three exploration and appraisal wells ongoing in Norway: 1) Solberg (spudded 2 February 2014). 2) Pil (discovery announced 6 March 2014) – production test underway ahead of potential sidetrack. 3) Butch East (spudded 29 December 2013) . 4) Butch South West scheduled to be drilled directly following Butch East.
  • Njord and Hyme fields expected back on stream in summer 2014, following reinforcement on Njord A – ahead of a redevelopment programme
  • Production guidance for 2014 is 4,000-6,000 boepd
  • 2014 exploration and appraisal capex is estimated to be approximately £110 million pre‐tax (£35 million post tax) and development and production capex approximately £25 illion
  • Several exploration and appraisal wells being matured for drilling in H2 2014 to 2015 including likely wells on the Pil licence to appraise further upside and an exploration well close to the Snilehorn discovery
  • The Company is well positioned to achieve significant value growth through near term exploration drilling, field investments and potential asset acquisitions

Graham Stewart, Chief Executive, commented the following:

“2013 was another year in which we delivered a sustained, high impact exploration programme, which delivered success with the drill bit, coupled with a significant increase in our 2P reserves and contingent resources.

“Our active exploration drilling programme continues with operations ongoing on three exploration wells in Norway – Pil (Faroe 25%), Solberg (Faroe 20%) and Butch East (Faroe 15%). Pil has already been announced as an oil and gas discovery and a production test is underway. Butch East is the first of two back‐to‐back wells on the Butch area, on the same structure as the significant Butch Main discovery with the Butch South West well to follow. Drilling operations are also ongoing on Solberg.

“Following the Pil and Snilehorn successes, further de‐risked drilling targets are currently being matured for near‐term drilling while additional prospects are also being prepared for drilling decisions. With the new Snilehorn and Pil discoveries, the Greater Njord Area is increasingly becoming an exciting asset with substantial remaining reserves, new discovered resources, and further high potential drilling targets.

“We have strengthened our production portfolio with the East Foinaven oil field acquisition and by bringing both the Hyme oil field and the Orca gas field on‐stream in 2013. The unscheduled production interruption on Njord and the Hyme satellite since July 2013 affected production levels in the year and we look forward to their return to production this summer.”

Faroe Petroleum Audited Preliminary Results for the Year Ended 31 December 2013 can be found by clicking HERE.

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