Faroe Back In Black

AIM-listed Faroe Petroleum announced a return to the black on September 18.

Its first half results made no further mention of a motion proposed August 26 by its new largest shareholder DNO to put its two top executives on Faroe's board – which Faroe at the time had said might be part of a hostile takeover strategy. Although the motion was withdrawn by Oslo-based DNO the next day, the latter nonetheless said it hoped Faroe directors would "initiate without further delay a constructive dialogue with DNO, as they should with any large shareholder". At Aug.27, DNO's shareholding stake in Faroe was 28.23%.

Faroe’s 1H profit after tax of £42.5mn ($56mn) was buoyed by a £24.5 million post-tax gain on its Fenja field part-divestment to Canada’s Suncor, contrasting with Faroe’s loss in 1H2017 of £2.9mn.

Average 1H2018 production was 12,402 barrels of oil equivalent per day from its existing portfolio (1H 2017: 14,800 boe/d) reflecting temporary shut-ins at its Trym gas and Tambar oil fields in 1Q2018. Faroe’s full year 2018 production guidance is 12,000-14,000 boe/d, of which two thirds oil.

Faroe also disclosed that it hedged, on a post-tax basis, 100% of total gas production in 1H 2018, primarily through put-options and swaps at a weighted average of 42p/therm (about $5.50/mn Btu).