This company seems to have been searching for a long time - any ideas out there?

Unaudited Interim Results for the six months ended 30 June 2014
http://www.moneyam.com/action/news/showArticle?id=4890094
Faroe Petroleum announces its unaudited Interim Results for the six months ended 30 June 2014.

Highlights
Activity
· Norwegian exploration delivering significant success
o Pil oil discovery announced in March 2014, significantly larger than the pre-drill expectation followed by successful discovery in the Bue side-track well (combined 20 to 50 mmboe net to Faroe)
o A small oil and gas discovery was made on Novus and a condensate discovery on Solberg, announced in January and April 2014 respectively
o Butch East and Butch South West announced as unsuccessful in May and July 2014 respectively following the Butch Main oil discovery in 2011 which is now being planned for development
o 10 new licence awards in Norwegian 2013 APA Round (two of which are operated by Faroe)
· Strong production and pre-development portfolio
o Agreed to acquire 53.1% and 60% of operated Schooner and Ketch gas and condensate assets in the UK southern North Sea for initial consideration of £35 million with effect from 1 January 2014
o Njord and Hyme fields brought back onto production in July 2014 following successful completion of structural reinforcement work on the deck frame
o In line with our strategy to monetise discoveries, the Glenlivet interest is to be sold to Total (field operator) for a combined consideration of £10 million, part deferred
o Heads of agreement entered into with Perth partners enabling future joint development of Perth (Faroe 34.6%), Dolphin (Faroe 34.6%) and Lowlander (Faroe 100%)
o Average accounting production of 3,901 boepd(1) in the period (1H 2013: 7,477 boepd) - reduction mainly due to Njord and Hyme shut-in
o Average economic production, including Schooner and Ketch, of 7,592 boepd in the period (1H 2013: 7,890 boepd)

StockMarketWire.com
Faroe Petroleum has been awarded three new licensing options (LO 14/1, 14/2 and 14/3) in the Celtic Sea by Ireland's Minister for Communications, Energy and Natural Resources.

The two-year licensing options are located on the southern margin of the North Celtic Sea basin, in relatively shallow water depths of between 80 and 110 metres, which together cover an area of 3,458km2 and are all situated within 75km of the south coast of Ireland.

The options are targeting the under-explored Triassic Play, comprising Sherwood Sandstone reservoir juxtaposed against Lower Jurassic oil prone source rocks. The age and configuration of source and reservoir bear many similarities to the Wytch Farm oil field, onshore UK. Initial interpretation of existing 2D seismic data has revealed the presence of a number of large structural traps within the Licensing Options areas

StockMarketWire.com
Faroe Petroleum has completed the previously announced acquisition of a 53.1% operated interest in the Schooner field and a 60% operated interest in the Ketch field in the UK southern North Sea gas basin from Tullow Oil SK.

Remaining proved and probable reserves, as evaluated by the company, as at 1 January were 5.9 million barrels of oil equivalent ("mmboe") net to Faroe Petroleum.

Average economic production for the first six months net to the company was approximately 3,700 boepd. Chief executive Graham Stewart said: "We are very pleased to announce the completion of this acquisition, which broadens our production base further and both boosts and diversifies our oil and gas production portfolio. "Schooner and Ketch are good quality producing fields, well known to the Company and which offer upside potential in the form of increasing reserves, production and field life. The transaction is tax efficient for us, providing shelter for both past and future tax losses in the UK and is in line with our strategy to grow our production portfolio to continue the efficient funding of Faroe's ongoing exploration and appraisal programme."

Numis reiterates buy on Faroe Petroleum, target cut from 142p to 103p.

StockMarketWire.com
Faroe Petroleum has been awarded five new prospective exploration licences, including one operatorship, under the 2014 Norwegian APA (Awards in Pre-defined Areas) Licence Round on the Norwegian Continental Shelf.

The company has been awarded three new licences in the area surrounding its Pil & Bue discoveries:

· Licence PL793 Portrush - Blocks 6407/7, 8, 10 and 11: Faroe (20%), A/S Norske Shell (40% and operator), Petoro (20%) and VNG (20%): The Portrush Prospect is an analogue to the Boomerang Prospect. The main prospect at Portrush is an Upper Jurassic sandstone wedge along the main basin bounding fault, and in addition the licence area contains several other promising prospects and leads. The work programme includes licensing of 3D seismic data. The Boomerang Prospect is one of the targets to be drilled in summer 2015 by the Company (Faroe 25%) as a follow up to the Pil discovery in the PL586 licence.

· Licence PL794 Rosapenna - Blocks 6407/7 and 6407/10: Faroe (20%), Statoil (40% and operator), E.ON (20%) and VNG (20%): The Rosapenna prospect is another direct analogue to the Boomerang Prospect. The work programme includes the licensing of 3D seismic data.

· Licence PL792 Slynge - Blocks 6306/2: Faroe (50%) and Centrica (50% and operator): The Slynge area is located immediately to the south of the PL586 Pil licence with a structural setting analogous to the Pil discovery and Boomerang prospect. The work programme includes the licensing of 3D seismic data.

The company has also been awarded two new licences in the North Sea as extensions to existing exploration licences:

· Licence PL676BS Firkløver extension - Block 25/7, 10: Faroe (40% and operator), Total E&P Norge AS ("Total") (20%), Det norske oljeselskap ASA ("Det Norske") (10%), E.ON (10%) and Petoro AS (20%): This North Sea licence extension is located east and south-east of the existing North Sea PL676 S licence awarded in the 2012 APA round. The extension will include up-dip areas of the Krembanan Prospect east of the existing licence area. There is no incremental work programme cost associated with this licence. The work commitment is to perform and complete technical studies already initiated in the PL676S licence.

· Licence PL627B Shango Extension - Block 25/6: Faroe (20%), Total (40% and operator), Centrica Norge AS (20%) and Det Norske (20%): This licence is located north of the PL627 licence area and covers the northern extension of the Shango Prospect which is scheduled to be drilled in the first half of 2015. There is no incremental work programme cost associated with this licence.

Chief executive Graham Stewart said: "Faroe has again been very successful in its licence application strategy, winning a further five important licences in the latest Norwegian licensing round, and again demonstrating the strength of our position in Norway. These new awards enhance our licence portfolio, which is one of the largest on the Norwegian Continental Shelf. The new licences and licence extensions add exciting potential to the Company in Norway and further boost our already significant position in the highly prospective area surrounding our Pil and Bue discoveries.

"Despite the challenges of a low oil price, Faroe remains robust due to its strong, largely unleveraged balance sheet, profitable cash flow from a balanced production portfolio and modest capital commitments. This strength, in combination with Norway's progressive and highly successful fiscal incentivisation, ensures Faroe is well placed to continue to grow its position in Norway as a key part of our value creating strategy."

StockMarketWire.com
Faroe Petroleum expects 2015 to be another year of growth, despite challenging market conditions.

Chief executive Graham Stewart said that on an operational level, 2014 delivered excellent progress for the business with sustained production coming in at the upper end of expectations/guidance, significant exploration success at the Pil and Bue wells and the acquisition of the Schooner & Ketch gas fields.

He added: "Our Norwegian position is now one of the most significant of any UK independent E&P company and, despite challenging market conditions, the Company is set for 2015 to be another year of growth, with an exciting and fully-funded drilling programme of low cost, high impact exploration wells.

"With the current low oil price environment, there is much focus on both cost and financial strength. Faroe is particularly robust despite low oil prices, due to a combination of factors, including: our significant cash position and substantially undrawn debt facilities; sustained cash flow from Faroe's balanced oil and gas production and, following the sale in 2014 of our interest in Glenlivet, the absence of any substantial development capital commitments in 2015.

"Faroe is well placed to consider capitalising on potentially attractive asset opportunities which may become available in the period ahead."

StockMarketWire.com
Faroe Petroleum has confirmed the spudding of the Shango exploration well 25/6-5S (Faroe 20%) in the Norwegian North Sea.

The Shango prospect in Licence PL 627 (named Skirne East by the operator Total E&P Norge AS), is on the northern part of the Utsira High approximately 5 kilometres from the producing Skirne field, which is also operated by Total.

Shango is a structural prospect where the primary target is the Middle Jurassic Hugin formation reservoir, which has proved to be of excellent quality in the neighbouring Skirne field.

Faroe Petroleum announces its audited results for the year ended 31 December 2014.
Highlights
Exploration - successful year with significant Pil & Bue discoveries

· Significant Pil oil discovery in Norwegian Sea announced in March 2014, substantially larger than pre-drill expectations, followed by further successful discovery with the Bue side-track (combined 20-50 mmboe net to Faroe's 25% equity)
· An oil and gas discovery, not expected to be commercial on a stand-alone basis, made on Novus (close to producing Heidrun field) and condensate discovery on Solberg, announced in January and April 2014 respectively
· Butch East and Butch South West exploration wells announced as unsuccessful in May and July 2014 following the 2011 Butch Main oil discovery, which is now being planned for development
· Continued success in exploration licence rounds including awards of five new exploration licences (under the 2014 Norwegian APA Licence Round, announced in January 2015), three of which are in the Pil area
Production & Reserves - strong production performance and increase in reserves and contingent resources

· Average Economic Production(1) at 9,106 boepd (2013: 6,059 boepd) - at the upper end of guidance, with Njord and Hyme back on production, on schedule, and performing better than forecast
· Average Accounting Production1 at 6,579 boepd (2013: 5,871 boepd)
· Acquisition of operated interests in Schooner & Ketch gas fields (Faroe 60%) in the UK completed in October 2014, boosting gas production and improving tax efficiency through utilisation of carried forward tax losses
· Reserves increased by 13% with closing reserves at 30.6 mmboe (2013: 27.2 mmboe)
· Contingent resources increased by 49% to 109 mmboe (2013: 73 mmboe)
Financial - strong balance sheet and positive cashflows from operations, despite impairments

· Cash and net cash of £92.6 million and £69.6 million respectively at 31 December 2014 (31 December 2013: £40.6 million cash and net cash) £23.0 million drawn for Schooner and Ketch acquisition against the £160 million ($250 million) Reserve Based Lending facility
· Exploration Finance facility renewed and up-scaled to approx. £130 million (NOK1.5 billion) in September 2014
· Revenue £129.2 million (2013: £129.4 million) and EBITDAX £59.1 million (2013: £80.1 million) - reduction in EBITDAX principally due to lower realised price per boe at $71 (2013: $105)
· Loss after tax £55.0 million (2013: profit of £14.1 million) after pre-tax impairment charges of £38.5 million (2013: £2.1 million) and exploration write-offs of £131.7 million (2013: £15.4 million)
· Pre-tax exploration and appraisal capex of £87.2 million (£23.0 million post-tax) (2013: £73.0 million pre-tax, £24.8 million post-tax) and development and production investments (including acquisitions) of £48.3 million (2013: £48.5 million)
· Successful share placing in June 2014 raised £65 million (gross) - providing finance to accelerate exploration, appraisal and development activities and target further production acquisition opportunities

Outlook - active, fully funded exploration programme and well positioned for further acquisitions
· Forward exploration and appraisal programme fully funded from existing resources
· Four high impact exploration wells planned for 2015, including two follow up wells on the Pil discovery, all of which benefit from Norway's 78% exploration tax rebate
· 2015 exploration and appraisal capex is estimated to be approximately £100 million pre-tax (£26 million post-tax) and development and 2015 production capex is estimated to be approximately £17 million
· Production guidance for 2015 of 8,000-10,000 boepd, split 58% liquids (oil and condensate) and 42% gas
· 58% of 2015 Post-tax Production hedged - average floor at $89 per barrel for oil and £0.50 per therm for gas, predominantly with put options at the mid-point of our 2015 production guidance. Faroe aims to be cash-neutral in 2015 at an average Brent oil price of $60/bbl and gas price of £0.45 per therm with an expected average opex of approximately $30/boe
· In strong position to capitalise on market conditions with the aim of building value through further selective value-enhancing production acquisitions

(1) Economic Production in 2014 includes production from the acquired Schooner (53.1%) and Ketch (60%) fields from 1 January 2014 (the effective date). Accounting Production excludes production between the effective date and date of completion on 9 October 2014.


Graham Stewart, Chief Executive of Faroe Petroleum, commented:
"We are pleased with the progress of the Company in 2014 despite the low oil price environment. Operationally, the year delivered excellent results for the business with significant exploration success at the Pil and Bue wells, sustained production coming in at the upper end of expectations with Njord and Hyme back on production, and the acquisition of the Schooner and Ketch UK gas fields. With a reserves increase of 13% and a 49% increase in contingent resources in the year, the Company has again proved that its strategy to convert exploration prospects into resources and convert resources to reserves is working effectively.

"Our Norwegian position is now one of the most significant of any UK independent E&P company and, despite the challenging market conditions, the Company is set for another year of growth, with a fully-funded drilling programme of low cost, high impact exploration wells, all of which will benefit substantially from Norway's tax-based exploration financing incentives.

"In the current low oil price environment, there is much focus on both cost and financial strength. Faroe is particularly robust despite low oil prices, due to a combination of factors including: a significant cash position and substantially undrawn debt facilities; sustained cash flow from a balanced, low-opex and substantially hedged oil and gas production portfolio; and, following the sale in 2014 of our interest in Glenlivet, the absence of any substantial development capital commitments. Consequently, Faroe is well placed to deliver continuing commitment to its ongoing work programme and to capitalise potentially on attractive asset opportunities which may become available in the period ahead."

StockMarketWire.com
Faroe Petroleum has confirmed a promising discovery at the Skirne East exploration well 25/6-5S - although smaller than predicted.

The Total E&P Norge-operated well in the Norwegian North Sea encountered a net 10 metre gas column in the high quality Middle Jurassic Hugin formation.

Faroe - which has a 20% interest - says the preliminary volumetric gross estimate of the size of the discovery is 3 to 10 million barrels of oil equivalent recoverable (0.6 to 2.0 mmboe net to Faroe).

The partnership will now consider the potential for development of the Skirne East discovery. The Skirne East exploration well will now be plugged and abandoned as planned.

The Skirne East exploration well 25/6-5S spudded on 13 March 2015 and was drilled to a total depth of 2,366 metres below sea level. The Skirne East discovery in Licence PL 627 is located in the Norwegian North Sea on the northern part of the Utsira High approximately 5 kilometres from the Total operated producing Skirne field.

Chief executive Graham Stewart said: "We are pleased to announce the result of the Skirne East well which, although smaller than predicted, is a promising discovery particularly in light of the nearby Atla field which was recently developed with reserves within the resource range of the Skirne East discovery.

"During the coming months we expect to start drilling the first of two follow-up wells at the significant Pil discovery (Faroe 25%) on the Blink and Boomerang prospects, and also the Bister prospect to follow up on our recent significant Snilehorn discovery located close to the producing Njord field infrastructure.

"Our Norwegian position is now one of the most significant of any UK independent E&P company and with our robust balance sheet, despite challenging market conditions, the company is set for another exciting year in 2015."

StockMarketWire.com
Faroe Petroleum has confirmed the spudding of the Bister exploration well in the Norwegian Sea in licence PL 348/C, which also contains the producing Hyme field and the 2013 Snilehorn discovery.

The licence is located adjacent to the producing Njord field (Faroe 7.5%) with Statoil as the operator of both PL348 and Njord.

Well 6407/8-7 will be targeting oil and gas in the Jurassic, Ile, Tilje and Are formations (analogous to the Hyme oil field and Snilehorn reservoirs). There is a seismic amplitude anomaly on the Bister prospect of a similar character to the anomalies on both the Snilehorn discovery (estimated gross recoverable resource range of 57-101 mmboe) and the Hyme field. There is alsoevidence of a pressure barrier between Snilehorn and Hyme, which contributes towards the de-risking of the Bister prospect.

Results of Bister exploration well
Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, announces that drilling has reached target depth on the Statoil operated Bister exploration well in the Norwegian Sea (Faroe 7.5%).

The Bister exploration well 6407/8-7 spudded on 27 April 2015 and reached total vertical depth of 2,990 metres below sea level in the Åre Jurassic formation. This was followed by side-track 6407/8-7A which was drilled to a total vertical depth of 2,770 metres below sea level. The well and side-track targeted hydrocarbons in the Jurassic, Ile, Tilje and Åre formations (analogous to the Hyme oil field and Snilehorn reservoirs) and whilst good quality reservoirs were confirmed, no hydrocarbons were encountered at this location.

The Bister prospect is located in the Norwegian Sea in Licence PL 348/C, which is adjacent to the 2013 Snilehorn discovery (PL 348B) and nearby the producing Njord field and Hyme field (PL 348) (all Faroe 7.5%), and the results from the well will be used to calibrate the seismic interpretations in the licence, which still contains promising exploration targets. Statoil Petroleum AS is the operator of the PL348 licences and the Njord field.

The Bister well was operated by Statoil (35%) using the Transocean Spitsbergen drilling rig with partners GDF SUEZ E&P Norge AS (15%), E.ON E&P Norge AS (17.5%), Core Energy AS (22.5%) and VNG Norge AS (2.5%) and will now be plugged and abandoned as planned.

Graham Stewart, Chief Executive of Faroe Petroleum commented:
"Whilst the results for the Bister exploration well are disappointing, this was an opportunity to add further resources to an already resource rich licence, which includes the producing Hyme field and the significant 2013 Snilehorn discovery.

"This is the second well in our 2015 exploration programme, following the successful completion of the Skirne East discovery last month. During the coming months we also expect to start drilling the first of two follow-up wells at the significant Pil discovery (Faroe 25%) on the Blink and Boomerang prospects."

StockMarketWire.com
Faroe Petroleum's group production averaged approximately 11,324 barrels of oil equivalent per day in the five months to 31 May reflecting better than forecast performance from the main producing fields in its portfolio.

The average operating cost per barrel of oil equivalent for the same period was approximately US$22, reflecting higher throughput and lower costs in general. The company is expecting full year operating costs to be around $30/boe.

Following a successful wireline campaign on the Schooner and Ketch fields (UK) production has continued at stable rates and better than forecast. In the Brage field (Norway), the first of two infill wells has been successfully completed and brought on stream very recently, with good initial performance. The second infill well has spudded and is expected to be brought on stream in Q4 2015. Average production guidance for the year is under review but currently remains at 8,000 to 10,000 boepd. A review of this guidance will be undertaken following the summer maintenance period.

The company also said that drilling operations have started on the follow-up drilling programme to the significant Pil/Bue 2014 discoveries in the PL586 licence in the Norwegian Sea with the spudding of exploration well 6406/12-4S (Faroe 25%) on the Boomerang prospect.

And it said the Shell-operated exploration well to test the Portrush prospect in the PL793 licence (Faroe 20%) has been added to the expected programme for Q3 2015. The prospect is in the Norwegian Sea, close to the producing Njord field (and Pil discovery).

Chief executive Graham Stewart said: "I am delighted to report that Faroe Petroleum is performing very well despite continuing low oil prices and sector instability. 2015 is proving to be Faroe's most active year to date, with several exceptional prospects to be drilled and production at an all-time high.

"Faroe's consistent strategic focus and prudent approach to financial management have ensured that we have a strong balance sheet and are well placed to take advantage of attractive opportunities.

"Kicking off our follow-up drilling programme on the significant 2014 Pil and Bue discoveries, I am very pleased to announce the spudding of the Boomerang exploration well, located in the same licence and within tie-back distance of the producing Njord field infrastructure. I am also delighted that we can look forward to a further near-term exploration well, on the Shell-operated Portrush prospect, again located close to the Njord and Draugen fields.

"The Greater Njord Area, which includes the Pil and Bue discoveries, the producing Njord and Hyme fields as well as the Snilehorn discovery announced in late 2013, represent a significant proven resource and a substantial position for Faroe. The Company's exciting 2015 exploration drilling campaign, focused entirely on this area, has the potential to add considerable additional value."

StockMarketWire.com
Faroe Petroleum has confirmed the start of the Portrush exploration well 6407/10-5.

The Portrush prospect is located in the Norwegian Sea in licence PL793 and approximately 10 kilometres south east of the producing Statoil-operated Njord field (Faroe 7.5%) and 20 kilometres west of the Shell-operated Draugen field.

The exploration well will target prospective resources along the Vingleia fault in Upper Jurassic reservoirs, analogous to the reservoirs found in Pil, Bue and Draugen. The exploration licence PL793 was awarded to Faroe (20%) in January as part of the 2014 APA licensing round in a joint venture with AS Norske Shell (40% and operator), VNG Norge AS (20%) and Petoro AS (20%). The Portrush well will be drilled by the Transocean Barents semi-submersible drilling rig.

Chief executive Graham Stewart said: "I am very pleased to announce the spudding of the Shell operated Portrush exploration well located in proximity to our Pil and Bue discoveries and the Njord and Draugen fields. "In addition, drilling operations on the Boomerang prospect continue. The Company will announce the results from the Boomerang well when drilling operations are complete, which is expected in September 2015. The Company's exciting 2015 exploration drilling campaign, focuses entirely on this area in the Norwegian Sea, and has the potential to add considerable additional value."

Boomerang well results
Faroe Petroleum, is pleased to announce an oil discovery in the main bore of the Boomerang exploration well (Faroe 25%).

Highlights
Main bore 6406/12-4S:
· Drilled close to the Pil discovery
· The well encountered a 26 metre gross Upper Jurassic intra-Spekk/Rogn sandstones with good reservoir properties and moveable oil with preliminary estimates of recoverable volumes in the range between 13 and 31 million barrels of oil equivalent
· Hydrocarbons were also confirmed above the Pil oil-water contact in an 80 metre gross interval of Melke age sandstone of varying reservoir quality
· The main Pil reservoir sandstone was encountered within the water leg, as planned, giving important appraisal information for the Pil development

Side-track exploration well 6406/12-4A
· Drilled into the southern segment of the Boomerang prospect
· The well encountered approximately 530 metres gross thickness of Jurassic sandstones with poor reservoir quality
· The well had indications of hydrocarbons but the presence of moveable hydrocarbons was not proven
The 6406/12-4 wells were drilled on the Halten Terrace, about 33 kilometres south west of the Njord field and 1.7 kilometres south east of the Pil discovery well 6406/12-3 S.

The objective of the main well bore 6406/12-4S was to test the hydrocarbon potential in the south west segment of the Upper Jurassic Boomerang prospect close to the Pil discovery. The primary reservoir targets were Upper Jurassic reservoirs analogous to the Pil, Bue and Draugen field reservoirs.

The main well bore encountered a 26 metre gross Upper Jurassic intra-Spekk/Rogn sandstone. Preliminary analysis from wireline logs, pressure and fluid sampling shows that the well encountered sandstones with good reservoir properties and moveable oil. Preliminary estimates of recoverable volumes in the discovery range between 13 and 31 million barrels of oil equivalent.

The secondary objective of the main well bore was to investigate the extent, thickness and properties of Upper Jurassic Melke reservoir rocks, as well as the extent and level of the Pil oil-water contact. Hydrocarbons were confirmed above the Pil oil-water contact in an 80 metre gross interval of Melke age sandstone of varying reservoir quality, and the main Pil reservoir sandstone was encountered within the water leg, as planned, giving important appraisal information for the Pil development.

The exploration side-track 6406/12-4A was drilled into the southern segment of the Boomerang prospect with the main objective testing the hydrocarbon potential in the Upper Jurassic sandstone of the Spekk and Melke formations. The well encountered approximately 530 metres gross thickness of Jurassic sandstones with poor reservoir quality and reached a total vertical depth of 3,800 metres below sea level. The well had indications of hydrocarbons but the presence of moveable hydrocarbons was not proven.

The Boomerang well will now be plugged and abandoned and the rig will be moved approximately six kilometres to the north east to drill the Blink prospect (6406/12-5S). Blink is an independent structural and stratigraphic prospect. The well will target analogous Upper Jurassic reservoirs to Pil, Bue and Draugen.

This drilling campaign is being operated by VNG Norge AS (30%) using the Transocean Arctic semi-submersible drilling rig with partners Spike Exploration AS (30%) and Pure E&P Norway AS (15%).

Graham Stewart, Chief Executive of Faroe Petroleum commented:
"We are pleased to announce the results from the Boomerang well, which adds further resources to the Pil area from a new reservoir. This appraisal and exploration well has provided a significant amount of important data and again proven how prospective the Pil area is.

"While we carry out further evaluation, the exploration campaign continues with drilling of the Blink prospect, due to spud shortly. Blink is an exciting independent prospect targeted as a potentially large addition to the already significant Pil and Bue discoveries announced in 2014, all of which are located in the same licence."

Unaudited Interim Results for the six months ended 30 June 2015
Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, announces its unaudited Interim Results for the six months ended 30 June 2015.
Highlights
Operations - strong production performance and exploration continuing to deliver resource growth
· Strong production performance and low operating costs
o Average first half production of 10,971 boepd (H1 2014: 7,592 boepd[1]) as a result of good performance and high uptime in the main producing fields
o Balanced product mix of approximately 45% gas and 55% liquids
o Average operating cost per boe approximately $22 (2014: $33) - improvement due to higher volumes, cost efficiencies and weaker Norwegian krone
o Acquisition of Roc GB, announced in September 2015, increases our equity holdings in Blane and Enoch oil fields, strengthening our tax efficient UK production base
· Exploration programme continuing to deliver resource growth
o An oil discovery of 13-31 mmboe (net to Faroe 3-8 mmboe) was made on the Boomerang well in September 2015, adding to the 2014 Pil and Bue discoveries; the second of the two follow-up wells, Blink, to be drilled in Q4 2015
o Shell-operated Portrush well in Norway announced as dry in September 2015
o Two Norwegian exploration wells drilled and completed in H1 2015 - Bister was dry and Skirne East (Shango) was a gas discovery
o Further new exploration licence awards - five APA licences awarded in Norway in January 2015
Finance - enhanced cash flows and robust balance sheet
· Revenue £55.3 million (H1 2014: £53.5 million) and EBITDAX £39.8 million (H1 2014: £15.6 million)
· Realised hedging gains of £4.2 million net after premium (H1 2014: £0.5 million loss) - mainly on oil sales
· Operating profit £5.6 million (H1 2014: £15.4 million loss) and profit before tax £0.4 million (H1 2014: £20.1 million loss) - reflecting higher revenue, hedging gains, lower opex per boe and lower expensed exploration and appraisal costs
· Operating netback per boe $31 (2014: $38) - sharp drop in oil prices has been materially offset by combination of gains on oil hedges, stable gas prices and significant reduction in operating costs
· Exploration and appraisal capex £25.2 million (H1 2014: £65 million), equivalent to £6.3 million (H1 2014: £16.7 million) on a post-tax basis, taking account of 78% Norway exploration tax rebate
· Development and production investments £7.5 million (H1 2014: £9.8 million)
· Cash and net cash at 30 June 2015 £104.7 million and £81.7 million respectively (31 December 2014: £92.6 million and £69.6 million)
· Reserve based lending facility £145 million of which £23 million is drawn (31 December 2014: £23 million)
Outlook - narrowing of production guidance and continuing high-impact exploration programme
· Production guidance for full year 2015, excluding the impact of the recently announced Roc GB acquisition[2], narrowed to 9,000-10,000 boepd (previously 8,000-10,000 boepd) following strong performance in H1 2015 and successful Brage infill well
· Significant portion of production hedged, to underpin revenue
o Gas - approximately 90% hedged in H2 2015, 70% in 2016 and 50% in 2017 (on a post-tax basis) at 45-50 pence per therm
o Oil - approximately 33% hedged in H2 2015 and Q1 2016 (on a post-tax basis) at $60-90 per barrel
· Fully funded exploration and appraisal programme continuing as planned, with Blink exploration well, followed by two Barents Sea wells and at least one near field well in 2016
· Net exploration, development and production capital expenditure for 2015 forecast at approximately £100 million pre-tax (2014: £135 million), equivalent to £37 million on post-tax basis (2014: £71 million)
· Development plans for Butch, Njord and Pil are all progressing as planned with decisions scheduled for 2016 - all will benefit from significantly reduced industry costs
· With a balanced portfolio and a strong balance sheet, Faroe is well positioned to pursue growth opportunities.

Blink exploration well commences drilling in the Norwegian Sea

Faroe Petroleum is pleased to announce the commencement of the second Pil/Bue follow-up well with the spudding of exploration well 6406/12-5S (Faroe 25%) on the Blink prospect.

The Blink prospect is located in the Norwegian Sea in Licence PL586, which also contains the significant Pil and Bue discoveries (announced in 2014). The licence is located in proximity to the producing Njord field (Faroe 7.5%).
The drilling programme will target the Upper Jurassic reservoirs analogous to the Pil, Bue and Draugen field reservoirs. This well follows on directly from the Boomerang well which encountered a 26 metre gross Upper Jurassic intra-Spekk/Rogn sandstone containing estimated recoverable resources of between 13 and 31 million barrels of oil equivalent.

The Blink exploration well, located in water depth of approximately 360 metres, is operated by VNG Norge AS (30%) using the Transocean Arctic semi-submersible drilling rig with partners Spike Exploration AS (30%) and Pure E&P Norway AS (15%) and the results will be announced when drilling operations are complete.

I wish the blinkin' crude price would buck up...(with the price at the pumps remaining the same).....

The sp a few years ago would be way past 150p now....how times have changed and makes me wonder....crude cannot remain so low forever....

Operational Update
Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, is pleased to provide an operational update following completion of its 2015 drilling campaign as follows:

Highlights
- Production is continuing to perform above expectations and therefore 2015 full year guidance has increased to 9,500-10,500 boepd
- Blink exploration well 6406/12-5S (Faroe 25%) discovered prognosed reservoir but water wet
- The Pil, Bue and Boomerang discoveries constitute a large oil and gas accumulation and work will now proceed with field development planning
- Faroe's planned E&A drilling programme continues with an exciting programme for 2016 consisting of one frontier exploration well in the Barents Sea and two near field exploration wells, one in the Norwegian North Sea and the other in the Norwegian Sea. The 2016 total exploration programme cost is expected to be significantly lower than the 2015 programme
- The Njord Future Project is progressing to plan with tow-in expected in Q2 2016
- The Butch oil field development project has passed concept selection and will be advanced as a cost effective subsea tie-back to the Ula field
- Faroe has acquired a 75% interest and the operatorship of the South East Tor oil discovery in Norway from Lundin Petroleum
- Faroe's recent Roc Oil UK acquisition, comprising interests in Blane and Enoch, is expected to complete shortly
- Balance sheet remains strong with significant cash position, healthy cash flow, low debt and material undrawn debt capacity to assist in funding growth opportunities

Production
Production remains strong averaging approximately 10,350 boepd in the year to date. No significant further shut down periods are expected in any of the Company's largest fields and on that basis, Faroe announces an upward revision of the 2015 full year production guidance to 9,500 to 10,500 boepd average.

Exploration programme
Despite the disappointing well results on the Blink prospect, the Pil, Bue and Boomerang discoveries constitute a large oil and gas accumulation and together one of the most significant new discoveries and pending development projects in Norway in recent years. Their location, in close proximity to infrastructure and to Njord and Draugen, represents additional strategic significance. Work will proceed with planning of the Pil area field development (Faroe 25%). A large amount of data has been acquired during this year's drilling campaign, which will be used to revise the recoverable resource ranges, which currently stand at between 80 and 200 mmboe for Pil and Bue and between 13 and 21 mmboe for Boomerang. The combined discoveries have the potential to be either a standalone development or a tie-back to either the Njord field (Faroe 7.5%) or the Draugen field.

Faroe's drilling programme continues into 2016 with one frontier exploration well and two near field exploration wells currently being planned. The first well in early 2016 will be the giant Kvalross exploration well (Faroe 40%) in the Barents Sea operated by Wintershall. Kvalross will target a new play of Lower Triassic clinoform reservoirs within a megaclosure. The well will also target the Kvaltann Prospect consisting of channel sandstones in the Middle Triassic Snadd Formation. In addition to this high impact well, Faroe is planning two near field exploration wells, the first of which is the Norwegian North Sea Brasse exploration well (Faroe 50%) expected to be drilled mid next year. Brasse will test a structure immediately to the south of the Brage field and if successful could be tied back to Brage (Faroe 14.3%) or alternatively to Oseberg located a similar distance to the west. In addition, the Njord partnership (Faroe 7.5%) led by operator Statoil is planning to drill a new prospect, on the North Flank of Njord, in close proximity to the main field.

The Dazzler well in the Barents Sea, which was previously expected to be drilled in 2016, is now expected in 2017.

StockMarketWire.com
Faroe Petroleum reports a material increase in reserves following an independent technical report by Senergy (GB) Limited (LR Senergy).

Proved plus probable 2P reserves net to Faroe at 1 January 2016 have been estimated at 60.6 mmboe, representing an increase of 98.0% as compared to 30.6 mmboe at 1 January 2015. The principal differences result from:

* Adding the Butch field in Norway (Faroe 15%) to 2P Reserves: in October 2015, the operator Centrica and partners announced that the Butch field will be developed as a subsea tie-back to the BP-operated Ula field. LR Senergy has assessed Butch 2P Reserves net to Faroe at 6.4 mmboe;

* Adding Pil field in Norway (Faroe 25%) to 2P reserves: LR Senergy has evaluated the progress that has been made by the operator VNG Norge AS and partners in maturing the Pil discovery towards project selection in 2016, and has also evaluated the development options, which have been demonstrated to be economically viable. On that basis, LR Senergy has concluded that the volumes associated with the Pil project can be categorised as 2P Reserves. These have been assessed at 23.8 mmboe net to Faroe. The Pil 2P Reserves do not include the volumes associated with the Bue and Boomerang discoveries, which are currently less mature technically and will remain as Contingent Resources ("2C") for the time being;

* Further 2P Reserves have been added through the acquisition of Roc Oil (GB Holdings) Limited: LR Senergy have assessed 2P Reserves associated with the acquired 12.5% interest in the Blane Unit and 12.0% interest in the Enoch Unit at 1.6 mmboe;

* In addition, a number of positive technical revisions have allowed partial reserves replacement in the existing producing fields.

Chief executive Graham Stewart said: "I am very pleased to report this material increase in reserves over the year, generated principally from exploration success and which further underpins the significant value of the Company. This doubling of 2P reserves demonstrates clearly how our consistent strategy is delivering tangible results. "We look forward to an exciting three well exploration drilling programme for 2016 in Norway, which is firming up on cost efficient terms. Faroe enters 2016 in a robust financial position, with strong production, a solid cash balance and largely undrawn credit facilities."