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

StockMarketWire.com
Faroe Petroleum's main fields exceeded forecasts in the year to the end of December but revenues fell due to lower commodity prices.

Total average economic production rose to 10,530 barrels of oil equivalent per day (2014: 9,106 boepd) but revenue (excluding hedging gains) fell to GBP113.0 million (2014: GBP28.8 million).

EBITDAX rose to 60.4 million (2014: GBP59.1 million). This includes realised hedging gains of GBP9.3 million (2014: GBP0.5 million). General and administrative expenses were reduced and the loss after tax fell to GBP52.9 million (2014: GBP55.0 million) after pre-tax impairment charges of GBP45.1 million (2014: GBP38.5 million) and exploration write-offs of GBP83.6 million (2014: GBP131.7 million).

Chief executive Graham Stewart said: "2015 was another year of growth and good progress for Faroe despite a backdrop of significantly lower commodity prices. We delivered our exploration drilling programme safely and under budget, adding further material 2C resources, and doubled our 2P reserves in high quality assets, principally in Norway. Our diverse North Sea production portfolio also outperformed expectations, averaging 10,530 boepd with lower unit operating costs of $23 per boe, down by 30% from the previous year.

"We stated a year ago that we would aim to run a cash-neutral budget for 2015 and we are pleased to end the year with cash of £91.5 million (2014: £92.6 million) after drilling five exploration wells and acquiring further interests in the Blane and Enoch production assets in the UK. This outcome is testament to the quality of our portfolio and our consistently prudent financial management, in what remains a very difficult market.

"Looking ahead to 2016, the business is in a good position to face the continuing challenges of our industry and to seek to capitalise on our relative financial strength as we pursue attractive consolidation opportunities in our core areas on the UK and Norwegian continental shelves."

StockMarketWire.com
Faroe Petroleum has confirmed that drilling has started on the Brasse exploration well 31/7-1 in the Norwegian North Sea.

Faroe is operator and has a 50% interest.

The Brasse prospect is located immediately south of the producing Brage oil field (Faroe 14.3%) and, if successful, could be tied-back to the Brage facilities or alternatively to other nearby installations.

The well will target the Jurassic aged sandstones in a four-way dip-closed structure with a total vertical depth of approximately 2,750 metres in the Early Jurassic Statfjord Formation.

The water depth at the site is 118 metres and the well will be drilled using the semi-submersible Transocean Arctic drilling rig. The co-venturer in the PL740 licence is Core Energy AS (50%). Chief executive Graham Stewart said: "I am pleased to announce the spudding of the Faroe-operated, Brasse exploration well located in close proximity to our producing Brage oil field. This is a near field exploration target which provides significant upside potential to Faroe, in one of our core areas. On a post-tax basis the well is expected to cost Faroe less than £2 million."

StockMarketWire.com
Faroe Petroleum has completed a successful side-track appraisal well on the Brasse discovery in licence PL740 in the Norwegian North Sea (Faroe 50% and operator). The objective of the Brasse side-track well (31/7-1A) was to appraise the south-eastern part of the hydrocarbon bearing structure previously identified by the main discovery well. The Brasse side-track reached a total depth of 2,530 metres (MD) and encountered a 25 metre gross oil column and a 6 metre gross gas column.

Results based on extensive coring, wireline logging and sampling show that the well has encountered oil and gas in good quality Jurassic reservoir sandstones, similar to those seen in the main well, and provide important information about the reservoir distribution in Brasse.

The hydrocarbon-bearing interval in the side-track well was found to be at a similar pressure level to the hydrocarbon-bearing interval in the initial discovery well. Total gross volumes of recoverable hydrocarbons are estimated to be 28-54 mmbbls of oil and 89-158 bcf of gas (43-80 mmboe in aggregate). As already announced, the Brasse discovery well (31/7-1) encountered approximately 21 metres of gross oil-bearing and approximately 18 metres of gross gas-bearing Jurassic reservoir. The reservoir is of good quality and believed to be analogous to the effective reservoir at the Brage producing oil field (Faroe 14.3%). The Brasse discovery is located within tie-back distance to existing infrastructure: 13 kilometres to the south of the Brage field platform, in which the Company holds a 14.3% working interest, 13 kilometres to the east of the Oseberg Sor field platform, and 13 kilometres to the south east of the Oseberg field platform. Faroe and its co-venturer (Point Resources AS (50%)) will now begin assessing options for this discovery, located in one of Faroe's core areas in the Norwegian North Sea.

Chief executive Graham Stewart said: "We are very pleased to announce the results of this successful side-track appraisal well on the Brasse discovery, which proves the hydrocarbon and reservoir distribution found in the main discovery well and delineates the lateral extent of the discovered area. This discovery, in one of our core areas, builds, via this low cost exploration and appraisal well, on Faroe's already significant position in the Norwegian North Sea. Work will now begin on assessing options for monetising this important new asset, given its significant resource estimates and close proximity to existing infrastructure."

Barclays Capital today reaffirms its equal weight investment rating on Faroe Petroleum PLC (LON:FPM) and raised its price target to 100p (from 85p).

StockMarketWire.com
Faroe Petroleum (FPM) raised gross proceeds of £62 million at a price of 70p per share.

More than 88 million new shares in Faroe were placed.

The placed shares will represent, in aggregate, approximately 24.8% of Faroe's issued ordinary share capital immediately following admission.

The shares will, when issued, be credited as fully paid and rank pari passu with the existing shares, including the right to receive all future dividends and distributions declared, made or paid.

Faroe Petroleum chief executive Graham Stewart said: "I am delighted to announce the successful completion of this oversubscribed placing which has enabled us to acquire a high value portfolio of producing assets in one of our core strategic areas offshore Norway.

"As well as providing the funds for the acquisition, the placing proceeds will allow us to progress our recently announced Brasse discovery towards monetisation.

"I would like to thank our shareholders for their unerring support for our business and I would also like to welcome the new shareholders to the company.

"With the new funds in hand, coupled with our strong balance sheet and cash generative production portfolio, Faroe is now set on a pathway of becoming an independent E&P company of scale, with material upside potential both in terms of drill-bit leverage as well as the progression of our high quality discovered resource base towards commercialisation."

StockMarketWire.com
Faroe Petroleum has announced the start of the Njord North Flank-2 exploration well 6407/7-9 S in the Norwegian Sea. (Faroe 7.5%).

The NF-2 prospect is located in Licence PL107C immediately north of the Njord field (Faroe 7.5%). The well will target Middle and Lower Jurassic sandstone reservoirs of the Ile and Tilje formations in a fault-bounded structural closure, with a TD in the Lower Jurassic �re Formation. If successful, NF-2 could add further reserves and value to the Njord Future Project. The NF-2 exploration well, located in approximately 323 metres of water, is operated by Statoil Petroleum AS (20%) using the Songa Delta drilling rig, with co-venturers ENGIE E&P Norge AS (40%), DEA E&P Norge AS (30%) and VNG Norge AS (2.5%). Results from the well will be announced when drilling operations have been completed.

Faroe Petroleum also announced that it has conditionally acquired interests in five Norwegian producing assets from DONG including a 20% interest in the Ula field and associated production hub infrastructure. One of the conditions of the acquisition was a 30 day pre-emption period under which the partner in the Ula Field could have acquired the Interest. This period has now expired and the Company will now proceed towards the completion of the acquisition as planned.

Jefferies International today initiates coverage of Faroe Petroleum PLC (LON:FPM) with a buy investment rating and price target of 100p.

Barclays Capital today reaffirms its equal weight investment rating on Faroe Petroleum PLC (LON:FPM) and raised its price target to 100p (from 85p)

StockMarketWire.com
Faroe Petroleum has signed two banking facilities which, it says, will provide substantial finance to underpin the company's growth plans.

The two facilities are:
- US$250 million (approx. £200 million) reserve base lending facility. This facility is available to finance the relevant assets and approved capital expenditure, operating costs and acquisitions. In addition to the committed US$250 million, a further US$100 million is available on an uncommitted 'accordion' basis. This RBL has a 7-year final maturity (December 2023), with an amortising schedule from January 2020 and replaces Faroe's existing RBL facility which matures on 30 June 2018. The company currently has no loans drawn under the RBL facility.

- NOK1 billion (approx. £92.5 million) Norway exploration financing facility. This facility has the capability to finance the majority of Faroe's exploration and appraisal costs on the Norwegian Continental Shelf. In addition to the committed NOK1 billion, a further NOK0.5 billion is available on an uncommitted 'accordion' basis. The availability period of the facility is to 31 December 2019.

The facilities have been provided by BNP Paribas, BMO Capital Markets, Commonwealth Bank of Australia, Danske Bank, DNB Bank, ING, Royal Bank of Scotland, SEB, SR-Bank and Wells Fargo. Rothschild and Pinsent Masons advised the Company and Watson Farley Williams advised the banks.

Chief executive Graham Stewart said: "We are very pleased to have concluded this financing exercise, and to have received such strong support from both our existing bank syndicate and new lenders. The new facilities provide us with substantial funding to support the continuing growth of the Group and the financing of our development assets.

"The combination of existing cash, these new credit facilities and cash flow from the Company's significantly enhanced portfolio of producing assets, ensures that we are funded to take advantage of the material development upside in our portfolio and continue to invest in our value enhancing exploration programme on the Norwegian continental shelf."

StockMarketWire.com
Faroe Petroleum has announced the start of the Boné exploration well 7318/12-1 (Faroe 20%) and the decision to drill an appraisal well on the Brasse discovery in the 2017 drilling programme.

Licence PL716, which contains the Boné prospect (previously named Dazzler), is located in the western part of the Norwegian Barents Sea in a similar structural setting to the Johan Castberg discovery.

The primary targets for the well are the Jurassic Stø- and Nordmela sandstones with a secondary target within the Triassic Fruholmen and Snadd sandstone formations.

Licence PL716 was awarded to Faroe in June 2013 in the Norwegian 22nd Licensing Round together with co-venturers Eni Norge AS (30% and operator), Bayerngas Norge AS (20%), Petoro AS (20%) and Point Resources AS (10%). The Boné well is being drilled using the Scarabeo 8 drilling rig and the results will be announced when drilling operations are complete.

Faroe Petroleum also announced that the Licence PL740 partnership has committed to the drilling of an appraisal well on the Brasse discovery in mid-2017 (Faroe 50%).

Faroe as operator has entered into a contract with Odfjell Drilling for the use of the semi-submersible drilling rig, Deepsea Bergen, for the drilling operations. Faroe announced the Brasse oil and gas discovery in PL740 in July 2016. The main wellbore 31/7-1 encountered an 18 metre gross gas column and a 21 metre gross oil column, and the sidetrack well (31/7-1A) encountered a 6 metre gross gas column and 25 metre gross oil column, with both wells encountering good quality Jurassic reservoir.

Total gross volumes of recoverable hydrocarbons have been estimated by the Company to be 28-54 mmbbls of oil and 89-158 bcf of gas (43-80 mmboe gross in aggregate). The main objectives of the appraisal well are to reduce the uncertainty in the reserves estimates and to provide important additional information for the development project.

The Brasse discovery is located within tie-back distance to existing infrastructure: 13 kilometres to the south of the Brage field platform, in which the Company holds a 14.3% working interest and 13 kilometres to the south east of the Oseberg Field Centre.

Chief executive Graham Stewart said: "We are very pleased to announce the spudding of Boné, our first exploration well in 2017, located 90 kilometres to the northwest of the Johan Castberg discovery. This high impact well will test a large horst structure with very significant volume potential.

"We are also pleased to announce the forthcoming appraisal well on the Brasse licence which will serve to mature this discovery towards development. Together with Point Resources we are progressing feasibility studies which will be ongoing in parallel with the appraisal project.

"2017 will be another significant year for Faroe. We have a very full programme ahead of us in our core areas including exploration, appraisal, infill drilling and early stage development activity. Coupled with our strong production profile, solid cash position and recently increased and substantially undrawn debt facilities, we look forward to another period of growth across the business."

StockMarketWire.com
Faroe Petroleum has been awarded four new prospective exploration licences, including two operatorships, under the 2016 Norwegian Awards in Pre-defined Areas Licence Round on the Norwegian Continental Shelf.

The company has been awarded three new licences in the Norwegian North Sea area. These are:

- Licence PL740 B Brasse extension - Block 31/4 and 31/7: Faroe (50% and operator), Point Resources (50%): The possible northward extension of the Brasse Discovery on the eastern side of the Brage Field.

The work programme is the same as the existing PL740 Brasse licence (Faroe 50%).

- Licence PL870 Pabow - Blocks 25/6, 9, 26/7: Faroe (20%), Statoil (80% and operator). The Pabow Prospect is located on the edge of the Stord Basin, just East of the Shango licence (Faroe 20%).

The main prospect is a large stratigraphic closure of Upper Jurassic Ula reservoir sands.

The work programme consists of G&G studies before a drill or drop decision in 2018.

- Licence PL881 Goanna - Block 33/9: Faroe (30%), Wellesley Petroleum (70% and operator): The Goanna Prospect is located on the Tampen Spur on the north-western margin of the North Viking Graben.

It is a structural and stratigraphic prospect of Upper Jurassic age sandstones, updip of well 33/9-16. The work programme involves the acquisition of 3D data and a drill or drop decision by 2018.

The company has also been awarded one new licence in the Norwegian Sea area:
- Licence PL888 Canela - Blocks 6507/7: Faroe (40% and operator), ConocoPhillips (30%), Wellesley Petroleum (30%).

The license is located on the Revfallet Fault Complex on the Halten Terrace.

The Canela prospect consists of down faulted blocks west of the producing Heidrun Field.

Reservoirs are expected to be the same Fangst group sands as found in the Heidrun Field.

The work programme consists of the acquisition or reprocessing of 3D seismic ahead of a drill or drop decision in 2019.

Chief executive Graham Stewart said: "We are very pleased to announce the award of four important new licences in the latest Norwegian licensing round.

"We have added new exploration plays to our portfolio as well as consolidating our position around the high quality 2016 Brasse discovery which we will be appraising later in 2017.

"We look forward to integrating these new licences into the exploration portfolio. The addition of good quality exploration acreage, our enhanced production portfolio and development pipeline ensures that we continue to expose our shareholders to balanced but high impact growth opportunities."

StockMarketWire.com
Faroe Petroleum's 2P reserves rose by 42% to 81.3mmboe at the start of January - up from 57.4 mmboe at the beginning of 2016.

It said the significant increase (reserves replacement of approximately 5 times) was a result of both the acquisition of interests in the Norwegian Ula, Tambar, Trym and Oselvar producing fields and positive reserve revisions.

2C contingent resources were 7.5% lower at 90.9 mmboe (1 Jan-16: 98.3 mmboe) reflecting the addition of new resources from the 2016 Brasse discovery which in part compensated for the reduction in resources associated with the respective withdrawal and relinquishment of interests in the Perth, Lowlander, Tornado and Solberg licences.

Chief executive Graham Stewart said: "2016 was transformational for Faroe with the acquisition of a Norwegian portfolio of producing assets from DONG doubling group production, the material Brasse discovery in Norway, and a successful £66m equity fund raise.

"Production from our UK/Norwegian portfolio averaged approximately 17,400 boepd in 2016, and we increased our 2P reserves base by 42% to 81 mmboe.

"We ended the year with a significant cash position of £97million and a new seven year Reserve Based Lending facility of $250million which is undrawn.

"We are now poised for a major growth phase as we invest across our core hub assets in 2017 and beyond, and believe that we have the asset base to reach our stated goal of 40-50,000 boepd over the next five years.

"We continue to seek to capitalise on our strong financial position to pursue consolidation opportunities in our core areas on the UK and Norwegian continental shelves, while kicking off another exciting high impact exploration drilling campaign."

The Oil Man: Oil price, Faroe Petroleum - By Malcolm Graham-Wood | 10th February 2017

The oil price is marginally down on the week but little has happened. The inventory figures may have signalled panic, but were rescued by the gasoline draw helped by lower refinery runs but better signs of growth in the economy. A very slight thaw in the Donald's attitude towards China is detected but don't bet the house on it.

Company news has been very thin this week which is good as I have had a load of company meetings which you will see being written up during next week.

Faroe Petroleum

An operations update from Faroe (FPM) today and as expected all is going well. Production is down but as expected due to Njord and Hyme outage and a small time at Trym where Harald takes priority on lifts. Operational expenditure (opex) is $24 which is good but will rise this year due to the lower production, reserves are up, 2P is now 81.3 million barrels of oil equivalent (mboe).

At ODA all kit is ordered, taking advantage of current low costs and at Tambar we can expect up to 5 wells on site by 2018. The new APA licence awards give a pleasing mixture of near and longer term as well as higher and lower risk and reward.

Financially, they have £97 million of cash and with the new RBL and EFF arrangements with 10 banks new and old, undrawn and leaving them with all options covered. Being in such a strong position means that the company can look for further acquisition opportunities and the company point out that they are full of ambition and keen to accelerate the pace of growth.

So, everything in the garden is rosy and management and shareholders can sleep easily at night, or can they?

Delek Group holds 20% of the shares and having just got a recommended offer through on the cheap from Ithaca (IAE) I hope that should the same thing happen here management wouldn't surrender with as little determination as did the Ithaca board.

FPM remains right up there as one of the best in the sector, with exceptional management, a strong balance sheet with scope, and a cracking portfolio at all stages of the cycle, let's hope it can remain independent and of course, go Dazzler!

StockMarketWire.com
Faroe Petroleum has confirmed that the Bone exploration well in the Barents Sea has been plugged an abandoned.

Faroe chief executive Graham Stewart said: "While we are disappointed that no hydrocarbons were present in the Realgrunnen section at this frontier location, the well provides important new data and information which will allow further evaluation of this extensive licence in the Barents Sea province.

"Our 2017 drilling programme continues with plans progressing well for the appraisal of the 2016 Brasse discovery this summer, which will be operated by Faroe.

"We are also maturing a number of exciting new drilling targets in Norway with potential to take advantage of the continuing low drilling costs."

Faroe said the Bone well had been drilled to a total depth of 3,501 metres.

The well encountered approximately 106 metres of gross water bearing reservoir in the primary target, the Realgrunnen Group.

Data acquisition and sampling had been undertaken including logging and water sampling.

The well was operated by Eni using the Scarabeo 8 drilling rig.

The well is part of licence PL716 which was awarded to Faroe (20%) in June 2013 in the Norwegian 22nd licensing round together with co-venturers Eni Norge AS (30% and operator), Bayerngas Norge AS (20%), Petoro AS (20%) and Point Resources AS (10%).

21 March 2017
FAROE PETROLEUM PLC

Final Results for the Year Ended 31 December 2016

Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, announces its audited results for the year ended 31 December 2016.

Highlights
Operations - record production and reserves growth
· Strong production performance and significant reserves growth
o Total average economic production1 for 2016 at 17,395 boepd (2015: 10,530 boepd) - ahead of guidance mainly due to the newly acquired interests in the Norwegian Ula, Tambar, Trym and Oselvar producing fields which performed ahead of expectation
o Balanced product mix of approximately 58% liquids and 42% gas
o Average economic operating cost per boe1 in line with prior year at $25 (2015: $23)
o 2P Reserves increased by 42% with closing reserves at 81.3 mmboe (2015: 57.4 mmboe) - reflecting the acquisition of further producing assets and positive reserves revisions on existing assets
· Exploration success, adding material 2C Contingent Resources
o 2C Contingent Resources were 90.9 mmboe (2015: 98.3 mmboe) - new high quality resources were added by the 2016 Brasse discovery, largely offsetting the reduction in resources following relinquishment and withdrawal from the Perth, Lowlander, Tornado and Solberg licences
o Norwegian North Sea drilling: significant Brasse oil and gas discovery (Faroe 50% and operator) estimated at 43-80 mmboe (gross) in good reservoir located near Brage and Oseberg production facilities - appraisal scheduled for summer 2017
o Norwegian Sea drilling: discovery on Njord North Flank (Faroe 7.5%) exploration well and side-track with estimated resource range 2-28 mmboe gross
o Norwegian Barents Sea drilling: dry well with the Kvalross frontier exploration well (Faroe 20%)
o Six APA licences awarded in Norway in January 2016 and one licence option (Faroe 100% and operator) located close to the producing Corrib field, awarded offshore Ireland in July 2016

Financial - equity fund raise and new 7-year Reserve Based Lending ("RBL") facility ensure robust balance sheet
· Unrestricted cash and net cash of £96.8 million at 31 December 2016 (31 December 2015: £91.5 million cash and £68.5 million net cash) - with no drawn RBL debt (2015: £23.0 million drawn)
· Raised £66.1 million, before expenses, in share placing and open offer in July and August 2016, to fund the acquisition from DONG of producing assets and accelerate the new Brasse discovery towards development
· New, four-year NOK1 billion Exploration Financing Facility ("EFF") and seven-year $250 million (and a further $100 million accordion) RBL facility secured in December 2016 on improved terms with existing and new lenders
· Revenue (excluding hedging gains) of £94.8 million (2015: £113.0 million) - reduction reflects lower accounting production (revenue from the acquired DONG assets between the effective date and completion date reduced the final cash consideration paid on 6 December 2016 from $70.2 million to a net $30.4 million)
· EBITDAX £25.8 million (2015: £60.4 million), includes realised hedging gains of £4.7 million (2015: £9.3 million) classified as Other Income - reflecting lower revenue, lower realised hedging gains and higher opex
· Loss after tax of £32.8 million (2015: £52.9 million) after pre-tax impairment charges of £2.8 million (2015: £45.1 million) and exploration write-offs of £29.9 million (2015: £83.6 million)
· Pre-tax exploration and appraisal capex of £47.5 million (£12.1 million post-tax) (2015: £61.9 million pre-tax, £14.8 million post-tax) and development and production investments (including acquisitions) of £32.8 million (2015: £38.7 million)


Outlook - high quality investment programme progressing to deliver material organic production growth
· FDP submitted on Oda oil field (Faroe 15%) and FDP submission on Njord Future Project, including Bauge development (Faroe 7.5%) scheduled for March 2017 - other pre-development projects being matured towards development decisions
· Investment programme to increase production from existing fields progressing - installation of gas lift and infill well programme of two wells on Tambar (Faroe 45%) being planned for 2017/18 and infill drilling re-commencing on the Brage field (Faroe 14.3%) in April 2017
· Development and production capex for 2017 is estimated to be approximately £90 million (2015: £32.8 million) - funded from cash reserves, cashflow and RBL facility
· Production guidance for 2017 narrowed to 13,000-15,000 boepd (previous guidance 12,000-15,000 boepd), split 60% liquids and 40% gas - the decrease on 2016 reflects production interruptions due to infill drilling and other production enhancing work in 2017, Njord and Hyme temporary shut-in, and natural production decline
· Currently two firm exploration and appraisal wells in 2017 in Norway (Boné frontier exploration well and Brasse appraisal well) with potential for further additions, all benefiting from Norway's 78% exploration tax rebate
· Committed exploration and appraisal capex in 2017 estimated to be approximately £45 million pre-tax (£11 million post-tax) (2016: £12.1 million post-tax) - fully funded by existing cash and the EFF
· 90% of 2017 and 40% of 2018 expected post-tax gas production hedged at average floor of 41p/therm and 30% of 2017 post-tax oil production hedged at an average floor of $54 per barrel
· Well positioned to capitalise on market conditions to add value through further selective asset acquisitions


Graham Stewart, Chief Executive of Faroe Petroleum, commented:
"2016 was transformational for Faroe with the acquisition of a significant Norwegian portfolio of producing assets which doubled Group production and added material reserves, the material Brasse discovery in Norway, and a successful £66 million equity fund raise. Production from our UK & Norwegian portfolio averaged approximately 17,395 boepd in 2016, and we increased our 2P reserves base by 42% to 81 mmboe. Ending the year with a significant cash position of £97 million and a new undrawn seven year Reserve Based Lending facility of $250 million puts Faroe in a strong position.

"With our hub area focus, centered principally around the Ula, Njord and Brage areas, Faroe is now in position for a major growth phase as we take advantage of low industry costs and invest across our core assets in 2017 and beyond. We believe that we have the asset base to reach our stated goal of 40-50,000 boepd organically within the next five years, with robust economics even at low commodity prices. We will also continue to seek to capitalise on our strong financial position to pursue further consolidation opportunities on the Norwegian and UK continental shelves, while maintaining our focus on high impact exploration and appraisal drilling."

StockMarketWire.com
Faroe Petroleum said its Brasse appraisal well has proved the presence of an excellent hydrocarbon bearing reservoir to the south of the original discovery.

The Faroe-operated well (31/7-2S) has been drilled to a total depth of 2,450 metres, targeting a seismic anomaly approximately two kilometres to the southeast of the main discovery well (31/7-1 announced July 2016).

Faroe said the appraisal well - a 50-50 joint venture with Point Resources - successfully penetrated the oil-water contact on the flank of the Brasse field and encountered approximately 8.5 metres of gross oil-bearing Jurassic reservoir above the oil water contact.

It said preliminary results based on extensive coring, wireline logs and pressure data showed that the well had encountered oil in a sand rich reservoir of very good quality.

It said preliminary analysis confirmed the same oil-water contact as in the 31/7-1 discovery well and side-track and indicated good pressure communication within the reservoir. It said the joint venture had now committed to perform a drill stem test for further confirmation of well productivity, investigation of reservoir distribution and to provide important additional information for development project planning.

Faroe said advanced pressure gauges, which communicate with surface after the well has been plugged and abandoned, would be installed in the 31/7-2S appraisal well to provide long term pressure monitoring of the reservoir. It said the joint venture would shortly decide on whether to drill a potential side-track to the current well (31/7-2S).

The joint venture would also decide on whether to drill a potential second appraisal on the Brasse discovery later this year, dependent upon further analysis of the 31/7-2S well and DST results.

Faroe said evaluation work on the recently awarded prospective Brasse Extension area (Faroe 50% and operator) also continued, ahead of a potential decision to drill in 2018.

Chief executive Graham Stewart said: "We are very pleased to announce the results of this important appraisal well which firms up the southern extent of the Faroe-operated Brasse field.

"This well proves the presence of excellent hydrocarbon bearing reservoir to the south of the original discovery and data gathered and yet to be gathered from the forthcoming DST will provide key information as we continue to progress towards development sanction.

"Importantly, preliminary analysis of the well results confirms Brasse as a commercial discovery.

"Brasse is a significant project for Faroe and the region and it also highlights Faroe's ability to continue to add significant value through low-cost drilling in our core areas.

"While continuing with an exciting ongoing exploration programme in Norway, Faroe is also actively investing in pre-development and development of several of our own discoveries, each of which has the potential to transform the value of the company in the coming years."

StockMarketWire.com
Faroe Petroleum's output averaged 15,100 barrels of oil equivalent in the five months to the end of May with better-than-forecast performance from the main producing fields in the portfolio.

An update issued ahead of today's annual general meeting showed that cash increased to £113.8m (unaudited) at 19 June 2017 from £96.8m at 31 December.

The company also said it had an undrawn reserves based lending credit facility of $250m (plus $100m accordion).

Chief executive Graham Stewart said: "I am pleased to report that Faroe Petroleum is performing very well across its range of activities, with strong production performance in the first five months averaging 15,100 boepd, appraisal success on the Brasse discovery, a growing low cost exploration and appraisal programme and significant progress on our development projects.

"The Company has also delivered good financial performance with strong cash flow, improved cash reserves and an undrawn Reserve Based Lending facility of $250 million - this ensures we have significant financial flexibility going forward.

"I am particularly encouraged, that as we enter the second half of 2017, alongside the excellent progress made across our production and development portfolio, we have been able to increase further the level of low cost and high impact activity in our exploration and appraisal portfolio, with the addition of the Goanna and Fogelberg wells later this year, as well as the farm-out to Nexen, for a full cost carry, on the East Corrib licence west of Ireland.

"With our focused strategy, centered principally around realising value from both our considerable exploration success and M&A success, Faroe is now in position for a major growth phase as we take advantage of low industry costs and invest across our core assets in 2017 and beyond.

"We believe that we now have the asset base to reach our stated goal of increasing production to over 40,000 boepd organically within the next five years, with robust economics even at low commodity prices.

"Looking ahead, while we actively pursue our organic programme, we will also continue to seek to capitalise on our strong strategic and financial position to pursue further consolidation opportunities on the Norwegian and UK continental shelves."

StockMarketWire.com
Faroe Petroleum has confirmed a successful drill stem test on the 31/7-2 S Brasse appraisal well in the Norwegian North Sea.

Faroe said the well flowed at a maximum stable rate of 6,187 bpd of oil which provided clear evidence of highly prolific reservoir and excellent quality sands with multi-Darcy permeability at the appraisal well location.

Other highlights:
- High quality light crude: similar quality crude to the nearby producing Brage field (Faroe 14.3%)

- Test free of undesirables: no undesirable components detected during the test which was free of sand and water

- Side-track next: a side-track well to be drilled following DST to further appraise reservoir distribution

- Volumes update to follow side-track: an update estimated range of recoverable resource volumes will be announced upon completion of the side-track

Chief executive Graham Stewart said: "We are very pleased to announce the results of this successful, Faroe-operated, drill stem test on the Brasse field, which significantly de-risks further upside in this reservoir and the licence area as a whole.

"The outstanding flow rates and reservoir quality confirmed by this well, located at the periphery of the Brasse field, are very good news and provide valuable information for our planning of the Brasse development project.

"We now look forward to the results of the imminent side-track with the objective of proving up further potential on this licence.

"The significant positive progress on Brasse to date is an excellent result from Faroe's world class exploration and drilling team and further validates our decision to take material stakes in selective high-impact exploration prospects, offering significant value upside to our shareholders."

Faroe operates the field with 50% equity together with Point Resources (50%).

Shares look undervalued @ 76.50p, but the charting front is against it at the moment
50 days MA has crossed down 200 days MA recently

Some large spikes at opening, still no direction